Micro, Small and Medium Enterprises (MSMEs) in India, owned by women entrepreneurs, are a powerful force for economic growth and social change. They are often at the forefront of innovation and have a major role to play in driving the nation’s economic development. MSME women entrepreneurs are typically smaller in scale than their male counterparts and have to work with limited resources and capital. However, despite these constraints, they have been able to make a significant contribution to the Indian economy. India owns about 15 million MSMEs run by women and over 70% of which are manufacturing enterprises. MSME women entrepreneurs are also making a big impact in the areas of agro-processing, food and beverage, health and wellness, fashion and design, and technology. Men have traditionally dominated these industries, but women entrepreneurs now play a more active role in their growth and sustainability.
Women entrepreneurs have seen tremendous growth in recent years, emerging as a powerful force in the global economy. Despite this growth, however, women entrepreneurs face significant financial constraints, which can limit the success of their businesses and limit their access to capital. According to a report from International Finance Corporation (FIC), about 90% of the MSME women entrepreneurs in India have not availed formal credit. Women-owned businesses remain in the minority, and the obstacles women face in pursuing entrepreneurship are diverse and often distinct from those faced by their male counterparts. Despite the requisite aptitude, determination, and creativity for running a business, women entrepreneurs face various personal and professional obstacles that hold them back.
Most financial institutions and banks avoid lending to women entrepreneurs mostly due to the lack of access to collateral. Many entrepreneurs find themselves at a loss when it comes to sourcing funds to launch or expand their businesses. As a result, they are often forced to abandon their dreams because of the limited resources at their disposal. In this article, we have explored the five best ways for female entrepreneurs to conquer their financial obstacles, enabling them to pursue their ambitions and leave a lasting mark on the world. However, before delving into the methods, it is important to recognise the particular challenges they may face on their entrepreneurial journey.
Challenges MSME Women Entrepreneurs face in their Entrepreneurial Journey
- The Problem of Securing Money
Women entrepreneurs in the MSME sector often face problems in securing money for their businesses. Women are often not able to access the same opportunities as men and they often lack the necessary collateral security in order to secure loans from banks or other formal sources of finance. This is because they tend to own fewer assets in their name than their men to use as collateral and secure fund. Additionally, women entrepreneurs tend to be less visible in the MSME sector than men. This means they are less likely to be considered for investment opportunities or to receive mentorship and guidance. This lack of visibility can also lead to a lack of recognition in the wider business community and reduce the chances of securing a loan or other forms of finance.
- Gender Bias
MSME women entrepreneurs face gender biases, including stereotypes, such as the notion that women are unable to lead and manage or that they are not competent enough to handle financial matters and other business aspects. They are often seen as having less authority than men, making it difficult for them to access the same resources and opportunities as male entrepreneurs. Women entrepreneurs are typically expected to operate on a smaller scale and with fewer resources than their male counterparts, limiting their potential for growth. Gender bias can also be seen in terms of access to capital. Women entrepreneurs often have to face more rejection than their male counterparts. Furthermore, they may not have access to the same networks of contacts and resources as male entrepreneurs, which can make it difficult to access the same resources. Lastly, women may also experience different forms of discrimination, such as being excluded from certain business opportunities or being subjected to gender-based harassment.
- Work-Life Balance
MSME women entrepreneurs face numerous challenges when it comes to work-life balance. As the sole owner of the business, they are usually the ones responsible for all aspects of the business, from managing operations to keeping up with the financials. As a result, many of these women have to juggle their workload with their personal lives, leading to long days and a lack of personal time. Many of these women are also primary caregivers and are responsible for taking care of their families. This makes it difficult to dedicate the time and energy needed to focus on their businesses. The lack of financial resources also limits the ability of MSME women entrepreneurs to outsource tasks or hire support staff to help them manage their businesses. This leaves them with little time to devote to their personal lives.
How to overcome the financial challenges faced by MSME women entrepreneurs in India
1. Develop Financial Literacy:
Developing financial literacy is the first step in overcoming the financial constraints that MSME women entrepreneurs face in India. Financial literacy helps entrepreneurs understand the various financial instruments available and make informed decisions regarding their finances.
2. Access to Credit:
Access to credit is another major challenge for MSME women entrepreneurs in India. Women entrepreneurs should look to access credit from government schemes and financial institutions. Such schemes provide easy access to capital for small businesses, which helps them to expand and grow.
3. Mentorship and Networking:
Mentorship and networking are also important for MSME women entrepreneurs. Mentors can provide advice and guidance on how to manage finances and access the right opportunities. Networking also helps women entrepreneurs to connect with potential customers, partners, and suppliers.
4. Utilize Technology:
Technology can be used as a powerful tool to access new markets, increase efficiency, and reduce costs. Women entrepreneurs should look to leverage technology to automate their processes and increase their reach.
5. Make Use of Government Schemes:
The Government of India has introduced various schemes to support MSMEs. Such schemes provide access to capital, mentorship, and other benefits. Women entrepreneurs should take advantage of these schemes to access financial assistance and other benefits.
Grow your MSME with collateral-free business loans
How Kinara Capital helps by lending to women entrepreneurs:
Collateral-free Business Loans
Kinara Capital offers Unsecured Business Loans allowing applicants to avail Business Loans without property collateral. All registered MSMEs from the manufacturing, trading, and services sectors can apply for myKinara Business Loans up to 30 Lakhs without giving up any assets for the financial credit. The borrowers not only receive financial independence from this but also get much more flexibility while handling their business operations.
Special Loans for Women – HerVikas
HerVikas Program is a Business Loan specially designed for women-owned businesses. MSME women entrepreneurs can avail a 1% discount on the interest rate on their loans without submitting any additional documents.
MSME women entrepreneurs don’t require to submit extensive documentation to get myKinara Business Loan. Minimal documentation helps women entrepreneurs get easy online loan approval. Hence, they can focus on optimum capital utilisation to fulfil their business goals without going through the process of visiting the lender’s office or branch or the time-consuming documentation procedures.
Hassle-free, Online Application Provision
MSME women entrepreneurs can apply for HerVikas Business Loan online through myKinara App. It will let them experience a quick and convenient method of acquiring an Unsecured Business Loan with easy approval. The entire amount will get sanctioned and disbursed in the applicant’s bank account within 24-hours.
Doorstep Customer Service
All Kinara customers can get doorstep customer services in their preferred vernacular language. The Kinara representative can visit the MSME women entrepreneurs in their business place and educate them on how Business Loans work and help them with the application process.
MSME Women Entrepreneurs are an important part of the economy and play a pivotal role in creating jobs and driving economic growth. Despite the numerous challenges they face, MSME Women Entrepreneurs have demonstrated their resilience and resourcefulness in the face of financial constraints. They have adopted various strategies to access capital, including securing credit from microfinance institutions, forging strategic partnerships with larger firms, and leveraging technology to boost their businesses. With the right support, MSME Women Entrepreneurs can continue to thrive and contribute meaningfully to the economy.
NBFCs have the potential to provide an invaluable resource to MSME women entrepreneurs in dealing with financial constraints. They provide access to capital, financial expertise, and support services that are critical to the success of any business. Furthermore, NBFCs are often more flexible than traditional lenders and can provide more tailored solutions to the unique needs and budgets of MSME women entrepreneurs.
Kinara Capital is a leading last-mile lending firm in India providing Collateral-free Business Loans for MSME women entrepreneurs. With the right support, Kinara can help women-owned MSMEs reach their full potential, creating a more equitable and prosperous future for them. Kinara’s HerVikas Business Loan takes away the main debacle for women since they often don’t own assets that can be leveraged as collateral. Kinara makes it easy for women-owned businesses to get a Business Loan as they realise that seeking loans for women entrepreneurs presents several social barriers and biases.
MSME owners can avail of fast and flexible loans from ₹1 lakh to ₹30 lakhs available within 24-hours from Kinara Capital. With its mobile-first approach, the company has made its myKinara App available in vernacular languages. Any registered MSMEs from manufacturing, trading and services sectors that need funding for their growth can opt for unsecured or collateral-free Business Loans from Kinara Capital. Give a missed call to 080-68264454 and get contacted by Kinara’s customer support team for all the answers.
1. What are the most common financial challenges faced by women entrepreneurs?
The most common financial challenges faced by women entrepreneurs include access to capital, inadequate funding, and lack of financial literacy.
2. What is microfinancing and how can it help women entrepreneurs?
Microfinancing is a type of financing that provides small loans to entrepreneurs who may not qualify for traditional bank loans. These loans can be used to start or expand a business, purchase inventory, and cover operating expenses.
3. Who Can Apply for a Business Loan at Kinara Capital?
Registered MSMEs in manufacturing for 1+ years, trading or services sectors for 2+ years can apply for Business Loans at Kinara Capital.
4. What documents are required for applying for a myKinara Business Loan?
The documents required for applying for an NBFC loan include a duly-filled loan application form, identity proof, address proof, business registration certificate, financial statements and business plan.
5. What are the advantages of availing loans from Kinara Capital?
The advantages of availing loans from Kinara Capital are collateral-free Business Loans within 24 hours, minimal documentation, and quick loan application process and disbursement. Kinara also provides doorstep customer service and support via phone in local languages.
- Women Entrepreneurs
- MSME women
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- Collateral-free Business Loans