By Akshay Soni and Madhu Singh Sirohi
The year 2020 brought a slew of unprecedented challenges. Though the pandemic impacted people from all walks of life, it has been harsher on women. Women have faced difficulty in taking care of both responsibilities, work and home. A brief by UNDP, Socio-Economic Impact of COVID-19 on Women Migrant Workers, states that women migrant workers faced a double burden of earning a livelihood and unpaid care work at home during the pandemic. They also had to face lower income, as it fell by more than half during the pandemic.
To achieve the overall development of women in India, we need to improve socio-cultural progress and independence, which can find a boost through entrepreneurship. Female founders are critical, but they are underfunded. When a woman founder approaches investors, they are perceived differently than men. A study by Boston Consulting Group showed that although women-founded businesses deliver more than twice (10% more cumulative revenue) the ROI over five years vs. male founded businesses, less than 2.5% of the VC investment across the world in 2020 went to women founders. A study by professors at Harvard Business School, Columbia University, London Business School and Stockholm School of economics delved into the reason for this, and revealed the difference in how men and women entrepreneurs are questioned – men are asked more ‘promotion’ (upside and potential gains) based questions and women are asked more ‘prevention’ (potential losses and risk mitigation) ones.
Fortunately, India has been witnessing a momentous change in women entrepreneurship in the last 2 decades. In the early 21st century, the government introduced various development schemes like the Entrepreneurship Development Programmes and Prime Minister Rojgar Yojana, which helped over 1.50 Lac businesswomen. India is seeing an increasing number of women entrepreneurs significantly influencing the social and economic demographics.
With consistent development in the start-up ecosystem in India, women now have access to resources which enable their own development and support in building economic resilience. As per the Sixth Economic Census by the National Sample Survey Organisation (NSSO), only 14% of the businesses in India are run by women entrepreneurs. However, this number is slowly growing. Banks, central and state governments, non-profits, and many other institutes/organisations are addressing the disparity through various initiatives. Mudra Yojana Scheme, initiated by the Government of India, provides business loans to women, so they can be financially independent and self-reliant. Another such scheme is Pradhan Mantri Rozgar Yojana; the scheme aims to create skill-based, self-employment for women.
Government, skill development institutes, educational institutes, corporate stakeholders, non-profit organisations, and many such are working towards creating a robust ecosystem for women entrepreneurs. One such initiative is Pragati, a CSR initiative of Meta, supported by The/Nudge Centre for Social Innovation. The initiative works towards incubating and accelerating, early-stage women-led non-profits that are working in the areas of women entrepreneurship and to drive awareness and adoption of technology among women in India.
Understanding the importance and potential of women entrepreneurship, numerous companies (mainly tech and financial) are partnering with various bodies to support the growth of women entrepreneurs, including those running nano enterprises in far flung rural India. Collaborating with a network of stakeholders to provide founders with the guidance and connect to grow their businesses, these companies offer opportunities that allow women to scale their ideas by creating a level playing field through the removal of many of the barriers faced otherwise.
Today, India has over 15.7 million women-owned enterprises and they are also leading the start-up ecosystem. Collaboration of different stakeholders is imperative to creating an ecosystem that allows women entrepreneurship to flourish. There is much scope in public-private partnerships to enable this joint effort and can be the avenue to a powerful support system enabling founders to not only survive, but thrive at scale.
(Akshay Soni is Managing Director at The/Nudge Accelerator and Madhu Singh Sirohi is the Head of Policy Programs & Outreach, India at Meta. The views expressed are authors’ own.)