Supporting women’s entrepreneurship through concerted action
Women entrepreneurs in India need programmes such as the WISE Initiative to improve their chances of becoming successful; and to mitigate the biases that currently work against themanalysis Updated: Mar 27, 2018 13:31 IST
All entrepreneurs know the challenges of securing funding for their ideas, but the bar is often set even higher for female entrepreneurs.
Last November, the governments of India and the United States co-hosted the Global Entrepreneurship Summit (GES) in Hyderabad. Almost 1500 entrepreneurs from around the world gathered to discuss new ideas and promote regulatory climates that foster innovation. The summit, co-hosted by Prime Minister Narendra Modi and Ivanka Trump, focused on the theme of promoting women’s opportunities to innovate, access capital, and succeed in business.
On the occasion of the Global Entrepreneurship Summit, US Chamber’s US-India Business Council launched the WISE initiative or the Women for Women Innovators, Social Leaders and Entrepreneurs. The initiative is led by India’s most dynamic women leaders— Vanitha Narayanan, chairman of IBM India Private Limited; Vani Kola, founder and managing director of Kalaari Capital; and Kiran Mazumdar Shaw, chairperson and managing director of Biocon. The programme seeks to improve access to funding for women-led businesses; develop skilling and training programmes; provide forums for mentoring to connect rising women managers with leading executives; and advocate for policy supporting an increased presence of women in key leadership roles.
During the WISE launch, women – and men – came together to discuss the challenges women face in the workplace, raise awareness about some of the barriers to accessing capital markets, and share personal stories and frank advice about how women can succeed. Specifically, female entrepreneurs reflected on the “unconscious biases” they face in their entrepreneurial journey and how these biases manifest themselves in unexpected ways.
In addition, women in India – and around the world – are also struggling to bring their ideas to market. This is contrary to reason because a significant number of entrepreneurs in countries like India and the United States are women. According to the Government of India’s sixth economic census there were over 8 million women entrepreneurs in India with 14% of businesses in India now female-run. 40% of entrepreneurs in the US are women, and more than 9.8 million US firms are owned by women. There are persistent challenges to address in both democracies for women to pitch ideas, find allies and partners within the ecosystem, secure funding, and innovate.
While we rightfully celebrated International Women’s Day earlier this month, we also know that over the long term, concerted action is needed to support female entrepreneurs. This is an opportune time to reflect on the progress that India and the U.S. have made in supporting women’s entrepreneurship, and identify additional opportunities to support the growing start-up ecosystem of businesses led by women.
Working towards equality of opportunity is particularly relevant now, in the context of the findings of the World Economic Forum’s Gender Gap report in 2017. The report ranks India at 104 out of the 144 countries surveyed. The need to improve on this benchmark has motivated the Government of India to redouble its efforts on achieving parity in economic opportunity and participation.
There are many government measures in place to support Indian women entrepreneurs through umbrella support programmes and loan schemes. Stand Up India is targeted at women and scheduled caste/ scheduled tribe communities, to set up greenfield enterprises in the manufacturing, services and the trading sector. The Pradhan Mantri Mudra Yojana (PMMY) also offers three loans schemes without collateral to finance women entrepreneurs, and the Pradhan Mantri Rozgar Yojana (PMRY) assists unemployed youth with setting up self-employment ventures with preference given to women.
These are supplemented by preferential loan schemes offered by public sector banks and targeted measures by state governments – for example, the government of Maharashtra offers financial incentives for firms that are female-owned and with a hired minimum of 50% women employees.
In India, 98% of women-led businesses are micro-enterprises, and in addition to standalone programmes, many government schemes aimed at the MSME sector also make additional provision for women entrepreneurs, recognising that access to funding remains a critical gap for this group. The Micro and Small-Enterprises Cluster Development Programme (MSE-CDP), Trade Related Entrepreneurship Assistance and Development Programme (TREAD) support project financing for women-led enterprises, and offer economic empowerment for women in non-farm activities through trade-related training and counseling, respectively.
WISE initiative: Leading through Private Sector Collaboration
According to the 2015 Nasscom Startup Ecosystem Report, funding for women-led startups in India was $0.168 billion in that year, when compared with the overall figure of $5 billion. Better access to loans and other channels of funding will drive up women entrepreneur numbers in the country while enabling more female-run businesses to achieve financial stability and funding for scale.
The EY G20 Entrepreneurship Barometer 2013 survey, says the influence of role models for women, and access to mentorship and advice is critical for existing and would-be women entrepreneurs. Mentorship and networks also enable an entrepreneur to establish and consolidate credibility with existing investors and build relationships with more diverse, and more substantial, providers of capital.
While the WISE initiative will be driven by industries and industry groups in the private sector, governments can take steps to promote these efforts. For instance, Intel and WISE are considering “Back to Work” programmes that involve skills training for women to re-enter the workforce after breaks in formal employment. There is strong support from India’s state governments to broaden the reach of such programmes to increase female participation in India’s workforce.
Working in partnership with NITI Aayog’s Women’s Entrepreneurship Cell (WEC), established to continue efforts launched at the GES, the WISE initiative will recommend policy reforms that would support entrepreneurship in India.
This cooperation and action will ensure the benefits of India hosting the GES will extend long beyond the Summit itself.
It is time we recommit ourselves to bold actions to improve women’s economic empowerment. Indeed, advancing conditions that support entrepreneurship will lift all boats.
Nisha Biswal is the President of the US-India Business Council and former assistant secretary of state for south and central Asia. Nivruti Rai is the country head of Intel India.
The views expressed are personal