By HP Singh
Credit and Finance for MSMEs: Women of today are venturing into various sectors of businesses and setting new standards. While breaking the barriers of gender inequality, they are also challenging stereotypes. Setting up a small business takes a lot of courage, along with market research and analysis, capital, and a strategic plan. Women today are starting small businesses and working hard to provide for their families while also providing employment opportunities to others in the area.
The growth of these small businesses, especially in rural and semi-urban areas, contributes highly to our nation’s economic growth. When the women of the family step forward and are empowered, it opens avenues of growth and development for the upcoming generation as well. However, women-led MSMEs in India have only grown by about 7 per cent in the past decade. There are various reasons for this including the hidden gender disparity, patriarchal society, and a lack of support and knowledge.
One of the biggest hindrances women entrepreneurs face is gaining access to credit. Acquiring a loan in India is directly associated with collateral. Women have to give multiple collaterals to gain access to loans for financing and strengthen their businesses. However, this collateral-based loan becomes a huge issue in our society. Looking at rural areas along with semi-urban areas, most assets are under the name of the male in the family. Additionally, not all women gain support from their homes due to the backward thought process that still prevails in certain regions where women are supposed to be within the four walls of the house.
Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises
Challenging these beliefs and supporting the dreams and aspirations of women entrepreneurs, there are certain microfinance institutions that give collateral-free credit access. Cognizing the importance of having female leaders and women empowerment, these institutions also gauged how it affects not only their families but also society overall.
Women entrepreneurs are an integral instrument for reducing poverty and empowering future generations. With their efforts, sharpened skillset, and hard work, they can analyze the needs of society and establish an enterprise to meet those demands. Because of the stereotypes relating to women, their companies are assumed to fail. To fight against this thought process, women entrepreneurs are usually fierce in achieving their goals and work diligently to ensure their business grows and expands. Other than passion, one of their main goals is to establish a startup that germinates with wanting to raise the standard of living for their families and society.
Through their MSMEs, these women are trying to adapt to the changing times while fulfilling local demands. Microcredit access allows these diligent and brilliant entrepreneurs to finance their businesses and expand their footprint. With adequate capital and resources, these women can churn out incredible innovations and strategies that will ensure the growth of the rural areas and our nation. With the fear of credit out of their minds, these women can focus on increasing their income and raising their standard of living. The growth of these MSMEs will ensure economic growth, raise income-providing individuals in a household, create income-generating opportunities, empower societies, and pave a smoother path for future generations.
HP Singh is the Chairman and Managing Director of Satin Creditcare Network. Views expressed are the author’s own.