Women's Entrepreneurship in India – IMF Finance & Development Magazine | March 2019
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- Authors: ASHLIN MATHEW
- Published: March 1, 2019
Overview
- Article by ASHLIN MATHEW, March 2019, describing barriers faced by women entrepreneurs in India and examples of programs and individuals addressing those barriers.
- Focus on social, legal, educational, and financial constraints that limit women’s participation in entrepreneurship and the labor force.
Labor force participation and economic impact
- Labor force participation rate for women in India was 27 percent in 2017.
- By that measure, India ranks 120th among 131 countries (World Bank data referenced).
- 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.
- About 79 percent of businesses run by women are self-financed.
- Women account for just 17 percent of GDP in India (statement by 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 (estimate by Annette Dixon).
- IMF study “Closing Gender Gaps in India: Does Increasing Women’s Access to Finance Help?” (2018) finds potential GDP gains of up to 6.8 percent if equal access to finance is combined with simplified labor regulations and improved women’s skills.
Key barriers to women’s entrepreneurship
- Social and familial pressures: societal stereotypes and household expectations that women “take care of the house” hinder entrepreneurship.
- Child-care support systems are lacking and “hold women back” (Aparna Saraogi).
- Lack of collateral: women rarely own property that could serve as collateral for start-up loans.
- Educational disparities: literacy rate for Indian women is 64 percent, compared with 82 percent for men.
- Occupational segregation: women generally occupy low-skill jobs in agriculture and services, often in the informal economy, and receive lower wages.
- Unequal access to finance: majority of women-led enterprises are self-financed; women face challenges securing investor interest.
- Low female representation in public life: women accounted for 19 percent of ministerial positions and 12 percent of members of Parliament as of January 2017 (Inter-Parliamentary Union data), ranked 148th among 193 jurisdictions.
- Vocational training bias: government-sponsored Skill India favors trades for men (plumbing, masonry, welding) while courses for women focus on beauty, wellness, and cooking, with none explicitly aimed at developing entrepreneurs.
Programs, organizations, and success stories
- Mann Deshi Foundation (women-run, established in the 1990s): offers training, a women’s bank, mobile business schools, mentorship, and a community radio station.
- Example: Radhika Baburao Shinde completed a 120-hour tailoring course in 2014; initial business earned equivalent of $5 a month; later expanded income to about 8,000 rupees a month through tailoring, cloth shop, and animal husbandry services.
- Example: Rupali Shinde borrowed $1,405 from Mann Deshi Bank, took a one-year business course, became financially and digitally literate, now employs five women and family income rose to $281 a month.
- SHEROES (community platform): provides counseling, mentors, and crowdfunding support.
- Example: Sathiya Sundari received mentorship and crowdfunding support in 2017; 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).
- Mentored more than 500 women-led start-ups since 2016 and enabled more than 5,000 women with skills.
- Indian Angel Network (IAN): of a portfolio of more than 130 start-ups, about one quarter are led by women; fewer than a third of the 10,000 deals reviewed each year are brought by women. Proportion of pitches from women rose from 10 percent four years ago to 30 percent today.
- Example of funded start-up: StyleDotMe received two rounds of funding totaling the equivalent of $322,000 in 2016 and 2017; later launched mirrAR.
Observations on regional and educational patterns
- States with higher female literacy rates have more women entrepreneurs.
- The region comprising India’s four southernmost states plus Maharashtra, where literacy is higher than the national average, is home to more than half of all women-led small-scale industrial units (Sixth Economic Census).
Policy implications and recommendations
- Create ecosystems that support every kind of woman entrepreneur to sustain long-term economic growth of “9 to 10 percent consistently in the next three decades” (Sairee Chahal).
- Improve access to finance for women to boost GDP and reduce unemployment; complementary reforms—simplifying labor market regulations and improving women’s skills—amplify gains (IMF 2018 study).
- Address legal and implementation gaps: establish effective legal structures supportive of women’s empowerment to close the gap between what the law prescribes and what actually occurs (Aparna Saraogi).
- Promote representation and mindset change rather than only policy/regulatory changes to improve investor behavior and societal attitudes (Debjani Ghosh; Padmaja Ruparel).
- Expand vocational and entrepreneurship-focused training for women beyond traditional sectors (e.g., include tech, trades, and business development).
Key statistics (exact figures from the article)
- 27 percent: women’s labor force participation rate in 2017.
- 120th: India’s rank among 131 countries by women’s labor force participation (World Bank).
- 14 percent: share of Indian women who own or run businesses (Sixth Economic Census, 2014).
- More than 90 percent: share of companies run by women that are microenterprises.
- About 79 percent: share of women-run businesses that are self-financed.
- 17 percent: share of GDP accounted for by women in India (Annette Dixon).
- 1.5 percentage points: estimated increase in annual GDP growth if half of Indian women were in the labor force, raising growth to about 9 percent (Annette Dixon).
- 6.8 percent: potential GDP increase if equal access to finance is combined with simplified labor market regulations and improved women’s skills (IMF 2018 study).
- $5 a month: early earnings for Radhika Baburao Shinde’s tailoring business.
- Less than $70: median household income in the area where Shinde lived (unspecified region).
- 8,000 rupees ($113): monthly earnings of Sathiya Sundari’s beauty parlor; rises to 15,000 rupees during December–March wedding season.
- 7,269 rupees: median monthly household income in rural areas of Tamil Nadu.
- $322,000: total funding for StyleDotMe in 2016 and 2017 (equivalent).
- One quarter: approximate share of IAN’s portfolio led by women (of more than 130 start-ups).
- 10,000 deals: number of deals IAN reviews each year; fewer than a third are brought by women.
- 10 percent → 30 percent: rise in proportion of pitches from women to IAN over four years.
- 19 percent: share of ministerial positions held by women in India as of January 2017.
- 12 percent: share of members of Parliament who were women as of January 2017.
- 148th: India’s rank among 193 jurisdictions tracked by the Inter-Parliamentary Union on women’s representation in parliament.
- 64 percent: female literacy rate in India.
- 82 percent: male literacy rate in India.
- $1,405: loan taken by Rupali Shinde from the Mann Deshi Bank.
- $56: monthly income of Rupali Shinde’s family before expansion.
- $281: monthly family income after Rupali Shinde’s business expansion.
- 120-hour: duration of Radhika Baburao Shinde’s tailoring course in 2014.
- Six-day: animal husbandry course taken free of cost by Radhika Baburao Shinde.
- 100 goats: number of goats Radhika Baburao Shinde inseminated free of cost when beginning animal husbandry outreach.
- More than 500: women-led start-ups mentored by WEE Foundation since 2016.
- More than 5,000: women enabled with skills by WEE Foundation.
Source: Women's Entrepreneurship in India – F&D Magazine | March 2019. ASHLIN MATHEW.
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