Women Entrepreneurs in India: The Funding Challenge Continues Amid Barriers, Bias, and Growing Support Initiatives
The startup ecosystem in India is flourishing as much as it is, but female entrepreneurs are still having problems accessing funds. In India, out of the total venture capital funding for startups, only 0.3% goes to women entrepreneurs in 2021. The credit gap in women-owned enterprises is more than $11.4 billion. Investments and schemes to ensure access to capital exist, but stereotypes and structural barriers continue to be some of the very real challenges to access.
The Reality of Funding Disparities
Increased number of startups led by women and yet the funding still remains inequitable. The founders are distrusted by investors and lenders alike. Studies show that more than 85% of women entrepreneurs have faced problems in raising loans from public sector banks and at times need a male co-signer. Since women are hardly represented in decision-making roles in VC firms, their access to funding gets even slimmer.
Government and Private Sector Support
The government has launched multiple schemes to support women entrepreneurs. The Stand-Up India Scheme and Credit Guarantee Scheme for Micro and Small Enterprises (CGS) provide financial aid, reducing collateral requirements. Additionally, the Startup India Seed Fund Scheme has allocated over ₹227 crore to 1,278 women-led startups, providing early-stage capital.
The private sector also chimes in. With investors in mind, platforms like Tyke and Grip deliberately seek to connect businesses led by women to obtain the required funding. Venture capital funds like She Capital and StrongHer Ventures seek to empower women by providing them with flexible financial options.
Challenges Beyond Funding
The woes of women entrepreneurs in India extend further beyond credit. There are social and cultural barriers to entry into business networks and mentorship. Many of them work in sectors traditionally perceived as extenders for women, hence hindered opportunities for higher growth industries like technology and manufacturing.
Ties between overwhelming responsibilities and family obligations remain yet another major hurdle. Unlike men, many women find no family backing as they make crucial decisions in business. Such factors have a cumulative effect on the risk appetite and eventual growth of the concern.
Success Stories and New Opportunities
Despite these challenges, Indian women entrepreneurs continue to break barriers. Founders like Kiran Mazumdar-Shaw and Ghazal Alagh have demonstrated that women-led businesses can achieve remarkable success. The rise of women-focused incubators, mentorship programs, and networking platforms is creating new opportunities for aspiring female founders.
Several states have also introduced policies to encourage women entrepreneurship. Andhra Pradesh offers subsidies on lease rentals and investment in fixed capital. Assam provides incentives for hiring women, while Jammu and Kashmir support research and marketing efforts for women-led startups.
Bridging the Gender Funding Gap
To create a more inclusive entrepreneurial ecosystem, continued efforts are needed. Expanding financial support programs, increasing women’s representation in investment firms, and fostering mentorship networks can help level the playing field. More investors and policymakers need to recognize the economic potential of women-led businesses and take proactive steps to close the gender funding gap.
While progress is happening, there is still a long way to go before Indian women entrepreneurs receive the investment opportunities they deserve.
