Mention entrepreneurship, and some of us instinctively tend to think in terms of internet/tech startups and their founders. But there’s another universe that boasts of tens of millions of entrepreneur-driven ventures: Micro, small and medium enterprises (MSMEs).
As of early August 2022, India had close to 1.8 million women-owned registered MSMEs, according to data shared in the Rajya Sabha by Bhanu Pratap Singh Verma, minister of state for MSMEs. That may sound like a mind-boggling number; until you realise that the total count registered on Udyam, the government portal for MSMEs, was close to 10 million (as of early March 2023, that figure had grown to close to 15 million).
This data point means that, as of last August, 18 percent of India’s registered MSMEs are owned by women. And that was a steady increase over the December 2021 figure of 16.6 percent.
It’s an encouraging statistic on the cult of entrepreneurship as well as women’s representation in it. Whether 18 percent is a high or low number may not be the right question to ask; what needs to be delved into is the poor access these women have to funding.
A recent report by the World Bank’s International Finance Corporation (IFC) pegged the number of women-owned MSMEs at roughly 15 million. The report reckons that 90 percent of these women entrepreneurs have not availed finance from formal financial institutions. Some 18 percent or 2.7 million of the 15 million women-owned MSMEs are what IFC calls women’s very small enterprises (WVSES). Their estimated credit demand? $11.4 billion, or ₹83,600 crore.
Such a lack of access to finance isn’t just an India problem. A 2023 study by FT Partners, a fintech-focussed investment bank, points out that although the number of women-owned businesses in USA has more than doubled in the past 20 years, “female entrepreneurs struggle to access funding… male investors are more likely to invest in male founders…” While inadequate capital was identified as the No 1 barrier for women founders, poor access to coaches and mentors are the other big obstacles.
The Forbes India cover package this fortnight, a collection of 11 inspirational stories helmed by Rajiv Singh, is on women founders attempting to break down such barriers. Consider, for instance, an interaction of Agra-born Saumya Mittal, co-founder & CEO of FitBudd, a global SaaS platform for health and fitness coaches, with a venture capitalist. “So how do you manage your responsibilities at home?” was one of the probing questions. “I am 100 percent sure he would not have asked this to any male founder,” Mittal, a chemical engineer from IIT-Delhi, tells Singh. For more on her upward journey, turn to ‘Fit and Fine’.
The purpose of putting together these stories is not to project these founders as the poster girls of tomorrow. Most startups today have male founders. Most startups fail. If more women pursue their entrepreneurial dreams and join the larger founder pool, with equal access to capital and community, they too get a shot. Whether that shot is at success or failure is not as relevant at this stage as is to an equal opportunity.
The good news is the scenario is brightening. As Shweta Bhatia and Aishwarya Arunkumar of Eight Roads Ventures India write in ‘The Growing Tribe of Women Founders’ on page 96, “When Eight Roads first started investing in India in 2007, women founders seeking venture/private equity funding were few and far between. Today, 24 percent of our companies have a woman as a founder or co-founder. Women founders in India are driving a cultural change…” Amen.
(This story appears in the 24 March, 2023 issue of Forbes India. To visit our Archives, click here.)