## Women struggle to break down barriers to starting a business

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### Labor force participation and macroeconomic impact
- Labor force participation rate for Indian women was 27 percent in 2017, about one-third that of men.  
- By that measure, India ranks 120th among 131 countries (World Bank data).  
- Only about 14 percent of Indian women own or run businesses (Sixth Economic Census, 2014).  
- More than 90 percent of companies run by women are microenterprises, and about 79 percent are self-financed.  
- Women account for just 17 percent of GDP in India (Annette Dixon, World Bank).  
- If even half of Indian women were in the labor force, the annual pace of economic growth would rise by 1.5 percentage points to about 9 percent (World Bank estimate).  
- World Economic Forum’s Global Gender Gap Report 2018 ranks 149 countries; India ranks 108th overall, with particularly low scores on health and survival and economic participation.  
- India ranked 52 among 57 countries in the 2018 Mastercard Index of Women Entrepreneurs.

### Core barriers to women’s entrepreneurship
- Social and household pressures: societal stereotypes that women should “take care of the house” and lack of child-care support systems.  
- Lack of collateral: women rarely own property that could serve as collateral for start-up loans.  
- Educational gaps: literacy rate for Indian women is 64 percent, compared with 82 percent for men.  
- Occupational concentration and wage gaps: women generally occupy low-skill jobs in agriculture and services, often in the informal economy, and receive lower wages.  
- Unequal access to finance: pervasive barrier to starting and scaling businesses; evidence suggests increasing women’s access to finance can boost GDP substantially.  
- Regulatory and representation obstacles: low female participation in public life—women accounted for just 19 percent of ministerial positions and 12 percent of members of Parliament as of January 2017 (India ranks 148th among 193 jurisdictions tracked by the Inter-Parliamentary Union)—contributes to persistence of formal and informal barriers.  
- Gender bias in investor community: fewer pitches and deals originate from women; only about a quarter of one angel network’s portfolio are led by women.

### Evidence on potential gains from policy and reforms
- IMF study “Closing Gender Gaps in India: Does Increasing Women’s Access to Finance Help?”: potential GDP gains greatest—amounting to a 6.8 percent increase in GDP—if India also simplified labor market regulations and improved women’s skills.  
- Investor behavior shifting: Indian Angel Network (IAN) saw pitches from women rise from 10 percent four years ago to 30 percent today.  
- Representation and mindset change highlighted as key needs by industry leaders.

### Support programs, interventions, and outcomes (case examples)
- Mann Deshi Foundation: women-run organization that teaches business skills, provides loans, runs mobile business schools, a women’s bank, a help line, mentorship programs, and a community radio station.  
  - Radhika Baburao Shinde: completed a 120-hour tailoring course; started a tailoring business earning the equivalent of $5 a month in a locale where median household income was less than $70. Later took a free six-day animal husbandry course, inseminated 100 goats free of cost, and now earns about 8,000 rupees a month.  
  - Rupali Shinde: took out a loan of $1,405 from the Mann Deshi Bank, completed a one-year business course, became financially and digitally literate, now has five women working for her, and family income rose to $281 a month; enrolled her daughter in an engineering course.  
- SHEROES: community platform providing counselors, mentors, and crowdfunding support.  
  - Sathiya Sundari (Tamil Nadu): crowdfunding campaign in 2017 raised start-up money in six days; her beauty parlor earns about 8,000 rupees ($113) a month, rising to 15,000 rupees during the December–March wedding season. Median monthly household income in rural Tamil Nadu is 7,269 rupees.  
- Women Entrepreneurship and Empowerment (WEE) Foundation: six-month entrepreneurship mentorship program (funded by India’s Department of Science and Technology).  
  - WEE has mentored more than 500 women-led start-ups since 2016 and enabled more than 5,000 women with skills to earn a living.  
- Technology-sector examples: StyleDotMe received two rounds of funding totaling the equivalent of $322,000 in 2016 and 2017; IAN reviews about 10,000 deals a year but fewer than a third are brought by women.

### Policy implications and priorities
- Expand women’s access to finance while simplifying labor market regulations and improving skills to maximize GDP gains (IMF study finding: up to a 6.8 percent GDP increase under combined reforms).  
- Promote legal and institutional frameworks that close gaps between what the law prescribes and what actually occurs in practice; improve female representation in decision-making bodies.  
- Design vocational and skills programs that target entrepreneurship for women (countering current bias where Skill India courses for women focus on beauty, wellness, and cooking while men are taught trades like plumbing, masonry, and welding).  
- Encourage investor mindset change and representation to evaluate ideas on merit and increase the share of women-led pitches and funded ventures.  
- Invest in child-care support systems, financial literacy, digital literacy, and mentorship networks to help women overcome household and social constraints.

*Source: Ashlin Mathew, “Women struggle to break down barriers to starting a business,” Finance & Development, March 2019.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2019/march/womens-entrepreneurship-in-india-mathew.pdf_