[stag_button url="https://milaap.org/fund/enterprise-development" style="red" size="large" type="stroke" target="_blank" icon="" icon_order="before"]Support a Woman Entrepreneur Today[/stag_button]Credits:Improving access to finance for women owned businesses in India: http://www.ifc.org/wps/wcm/connect/a17915804336f2c29b1dff384c61d9f7/Womenownedbusiness1.pdf?MOD=AJPERESInnovative business model: https://www.facebook.com/video.php?v=10204497629749068
It needs no repeating that women have to fight the hardest battles. From being robbed of a childhood in the name of religion to being ruthlessly forced out of their homes, women are up against insurmountable odds at every step of the way. Women though, haven’t taken these odds lying down. Time and again they have broken the shackles of societal pressures and made their way towards a life of dignity and respect. For most women, financial independence is the first step of the journey in this direction. And if this video is any proof, enterprising women will innovate and stop at nothing to succeed.[video width="640" height="360" mp4="http://blog.milaap.org/wp-content/uploads/2014/09/lady-with-cow.compressed.mp4"][/video]The International Finance Corporation (IFC), a member of the World Bank Group that focuses on the development of private sector in developing country, recently conducted a study on improving access to finance for women owned businesses in India.A peek into some of their findings gives invaluable insight into the travails of grass root businesswomen and makes stories of their success truly remarkable.Women mean business[caption id="attachment_5043" align="alignnone" width="960"] There are 3 million women owned businesses in India, employing over 8 million people[/caption]According to the study by IFC, there are 29.8 million Micro, Small & Medium sized Enterprises (MSMEs) in India and ONE IN EVERY TEN MSMEs is fully or partially owned by women. That is a staggering 3 million business outfits that are actively contributing to the economy.These contributions are no small feats either – women owned businesses contribute to 3.09% of the country’s industrial output and provide employment to around 8 million people.Around 80% of these businesses are in the services sector and over 90% are micro enterprises.The uphill task[caption id="attachment_4594" align="alignnone" width="960"] Despite having better repayment records, women owned businesses are neglected by formal financial institutions[/caption]Despite these glowing figures, women owned MSMEs face the greatest challenge when it comes to getting financed.The study estimates that the financing needs for women owned MSMEs are to the tune of 8.68 trillion rupees and yet, formal financial institutions contribute to only 27% of these funding requirements.The reasons for this wide gap between demand and supply are varied.High Risk: Women owned businesses that are majority in the service sector are perceived as ‘high risk’ when compared to businesses in the manufacturing sectors.Lack of collateral: Thanks to social and legal restrictions around ownership rights, women often don’t have sufficient collateral to apply for formal finance and have to depend on the male in the family for it.Lack of financial knowledge: Women often lack financial awareness and are reluctant to approach banks. To make matters tougher, the banks take no special efforts to make banking friendlier for women. Their attempts to tailor products to suit women owned businesses are feeble and insufficient.In the face of these hurdles, women often self-finance their ventures or turn to family and friends for support.And this is a shame because women borrowers have stronger repayment track records and non-performing loans are 30-50% lower in womenowned businesses.Milaap's journey began with giving financial aid to the Sakhi's of Maharashtra and fiercely enterprising women from all over the country have proved time and again that they will stop at nothing to thrive and flourish in a society where all odds are stacked against them.