Changing Face of Women Entrepreneurs in India
The Indian corporate scenario has witnessed a paradigm shift of demographics in recent years. The country has witnessed a surge in the number of women entering the economic wave. Upon entering the workforce, women have escalated –making big gains and contributions to entrepreneurship and job growth.
Women’s business ownership is now regarded as crucial to improving the quality of life of women in India, and the overall society. Women have come a long way in building valuable enterprises that impact job creation and the global economy.
Women have come a long way in building valuable enterprises that impact job creation and the global economy
Women Entrepreneurship and Economic Impact
According to the McKinsey Institute, closing the gender gap in economic activity could add $28 trillion to global GDP by 2025 – with almost $3 trillion added to India’s GDP alone. In fact, achieving gender equality in India would have a larger economic impact there than in any other region in the world.
A recent Facebook study suggests that four out of five women in India aspire to become entrepreneurs. According to the study, bringing more women into the entrepreneurial fold in India has the potential to create as many as 16 million businesses and 64 million jobs by the end of 2021.
Considering gender diversity and women in business, Indian women mark the top of the list with 12.9% women CEOs, standing better than the average of the European region which is around 7.8% according to the IRC Global Executive Search Partners’ study “The DNA of CEOs”.
However, according to the National Sample Survey Organisation, only 14% of business establishments in India are being run by women entrepreneurs. The data also revealed that most of these women-run companies are small-scale and about 79% of them are self-financed.
Challenges for Women Business Enterprise (WBE)
Out of networks: Venture capitalists look within their own networks while scouting for enterprises to invest in. Viewed globally, women are generally not prominent in venture capitalist networks.
Cultural barriers: Due to cultural barriers, financial institutions do not show much interest in female clients. Women have higher interest rates, collateralize higher share of loans and get shorter term loans.
Women on Executive boards: Only 15% of VC investment firms have at least 1 women on the executive board to make decision on investments made into companies.
Non-availability of mentors: Number of women in leadership roles who can be mentors for women entrepreneurs are less in number. Lack of mentors can hinder growth by not giving women the guidance they need. 48% of women owned start-ups state that they lack mentors or advisors
Lower growth rates: After the initial stages where women entrepreneurs are able to successfully launch their ventures, they lack access to advisors who can help grow and quickly scale their ventures beyond the proof of concept phase.
Lack of favourable ecosystems: Women entrepreneurs lack access to start-up ecosystems which allow women to ideate and thrive. Women mentors and advisors who work towards helping with the initial nudge towards entrepreneurship do exist but are few in number.