News Excerpt:

According to a new study only 3% women entrepreneurs in tier 2 and 3 cities in India out of the 300 surveyed had access to external funding to start or expand their businesses.

More about the study:

• The study was part of white paper on Women Entrepreneurs Transforming Middle India by Reserve Bank Innovation Hub (RBIH).
• It was released at an event organised by Federation of Indian Chambers of Commerce & Industry (FICCI).
• The study was undertaken because gender-disaggregated data on credit was not available earlier.

Key highlights of the study:

• Merely 3% of the respondents accessed external funding, such as bank loans or equity investments, to start or expand their businesses. 
• About 62% were self-funded, while 14.9% received support from friends and family.
• Only 2% of those surveyed availed benefits of government policies or grants.
• On average, women in India receive credit for only up to 27% of deposits made by them, whereas men receive up to 52%, demonstrating a gender gap of 25% in access to credit on deposits, per the report.

Information gap:

• Besides the vast gap in financing for these women-led ventures, the white paper also found a severe information gap. 
• The lack of gender-disaggregated data presents a significant barrier to improving women’s access to financial services.

Challenges faced by women entrepreneurs:

• The journeys of women entrepreneurs involved challenges ranging from securing funds to managing caregiving duties.
• They also have to navigate business expansion during periods of childbearing and parenting. 
• Roughly 35% of the women were forced to temporarily pause their entrepreneurial endeavours to fulfil caregiving responsibilities
• 45% women transitioned into or joined family businesses once their children reached a more independent age.

Support and motivation:

• Notably, 40.9% of women lived in joint families, either with their parents or their parents-in-law, tapping into this support network to balance both familial and career demands.
• Motivations varied - while 32.17% were driven by personal interest, 39.53% desired economic independence.