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Empowering Middle India's Women Entrepreneurs: The Key to Unlocking a USD 5 Trillion Economy

Written by: | Post Date: 2024/07/17 12:08 pm | Reading Time: min


Bridging the Gap: The Critical Role of Women in India’s Economic Future

India’s journey to reach the global female entrepreneurs’ GDP average is still significant. Approximately 17% of India’s GDP comes from female entrepreneurs’ accounts, which translates to USD 632 billion. If this figure was in line with the global average of 37%, it would go up to USD1.38 trillion (based on the 2022 GDP), thus covering almost half of the gap between India’s present GDP and an ambitious goal of USD5 trillion.

Unleashing Potential: Why Closing the Gender Entrepreneurship Gap (GEG) Matters

To promote gender parity and employment generation, women’s entrepreneurship should be improved as well. This is why India chose among six priorities for its G20 presidency development led by women. Still, there is a need for immediate intervention to boost women's entrepreneurship across all sectors and not only in self-help groups (SHGs) and micro-enterprises.

Breaking Barriers: Overcoming Subconscious Biases

Age Bias: The Unseen Hurdle

The various roles and responsibilities that women have often slow down their personal or entrepreneurial journeys. Hence, bias may result in capital providers along with other stakeholders discriminating against them expecting young relentlessly ambitious entrepreneurs only.

Asset Ownership Bias: Unlocking Financial Access

Women encounter systemic challenges in accessing collateral for loans due to legal and cultural barriers limiting their rights to own or inherit property. This restriction hinders their ability to secure funding and grow their businesses.

Location Bias: Redefining Business Spaces

Businesses operating from home or non-traditional settings may be judged unfairly. Women often choose these locations due to various responsibilities, and this bias can undermine their credibility.

Scale Bias: Challenging Growth Expectations

The expectation for rapid business scaling can disadvantage women, who may grow their businesses more slowly due to limited resources or different strategic choices.

Goodness Bias: Recognizing Social Impact

Women involved in socially or environmentally positive activities often receive less financial support, perpetuating the stereotype that their contributions are less in need of investment.

Risk Averseness Bias: Debunking Myths

Women face greater obstacles when entering the credit market for the first time due to stereotypes about their creditworthiness and business acumen.

Expectation Bias: Breaking Free from Stereotypes

Women often suffer from both a lack of expectation and opportunity. Until they scale, their income and work are often seen as optional, creating a bias against growth and risk-taking.

Strategic Moves: Overcoming Barriers and Enabling Growth

Capital Access: Breaking Financial Barriers

Women in family-owned businesses frequently run into obstacles such as compliance expenses or lack of assets and capital. Certain stereotypes can sometimes worsen this exclusion; for example, the mistaken beliefs about women's reluctance to apply for a loan or attract an investor. However, the uptake by some regions of government grants shows that reliance on external finance is important in efforts towards the empowerment of women entrepreneurs.

Family Support: Balancing Care and Career

A lot of women are becoming entrepreneurs after taking time off from their careers for events like having children — showing how important women's roles are in unpaid caregiving. This pattern is especially noticeable in Middle India, where many women start thriving businesses in their forties, opting for entrepreneurship due to its flexibility and independence.

Actionable Insights: Strategies for Gender Equity and Inclusivity

Data-Driven Decisions: Leveraging Gender Disaggregated Data

Understanding female entrepreneurship and the unique challenges (as well as opportunities) women face cannot be done without gender-disaggregated data. This approach is bridging gaps in traditionally male-dominated sectors, which could only have been achieved by acknowledging women's achievements.

Equitable KPIs: Setting the Right Benchmarks

Integrating gender objectives with broader urbanization and migration goals enhances policy effectiveness. Case studies from cities like Coimbatore, Kochi, Bhubaneswar, Dehradun, Vadodara, and Indore demonstrate the success of supportive ecosystems for women entrepreneurs.

Incentive Structures: Building a Supportive Ecosystem

Creating conditions for women to thrive as entrepreneurs includes advocating for flexible work policies, providing secure and affordable workspaces, and acknowledging unpaid care work. Transparent funding processes and state-supported grants can address the capital constraints disproportionately affecting women-owned businesses.

Public-Private Synergy: Transformative Partnerships

Shifting societal and familial norms to support women’s entrepreneurial ambitions requires policies fostering secure and inclusive ecosystems through public-private partnerships. Higher participation of women in public life can build an urban culture in Tier 2 India that fosters greater economic opportunities for all.

The Future is Female: Unlocking India’s Economic Potential

India is now on the verge of a great chance to alter the entire panorama of its economy by female entrepreneurship. If India were to double the number of female entrepreneurs, this would put India at par with countries such as Brazil and Korea; tripling it would place India alongside Russia and Australia. The different types of businesses run by women in tier 2 cities thus paint a picture full of potential.

The creation of an environment for female business involves tending to real financial gains, unconscious bias, technological uptake and PPP promotion. It is envisioned as a drastic shift in perspective on women's economic worth — an untying of boundless potential waiting to usher a metamorphosis into the tapestry composing India's wealth. Let us not linger; the time is upon us to act with vigour, fueling this vision with life and empowering the female captains of industry from Middle India so that it becomes more than just a wistful reverie.

 

This article draws on insights from a report published by the Reserve Bank Innovation Hub, emphasizing the critical role of women entrepreneurs in achieving India's $5 trillion GDP goal.

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