Why Promoting Women’s Role Among MSMEs Can Accelerate Growth
80% of female entrepreneurs in India lean on their personal resources for financing their businesses with only 14% women-owned enterprises being able to access formal credit lines.
There has been a great reset to the growth dynamics of India and the rest of the world. We need to build back better and faster than ever before. Building back better for women means challenging the status quo of women’s participation in the economy. Women constitute 48% of the population but form only 21% of the workforce. For the MSME sector it means raising the bar above its current contribution of 30% of the GDP .
Impact of the Pandemic on the MSME Sector and Women
Last year at the height of the first wave 43% of the MSME sector, that is 75 Million MSMEs were faced with the risk of closure. The threat to the MSME sector implied that 33% of India’s manufactured output and the job opportunities for a substantial proportion of 120 million people were at risk.
Women’s participation in the economy is one of the quickest ways of empowerment and sustainable growth. Without participation in the production of goods and services, any access to income is hard to visualize. The pandemic has negatively impacted 73% of women entrepreneurs, and 20% had their revenue nearly wiped out. Another 35% of the women entrepreneurs experienced a decline of 25%–75% in revenue.
How women Can Turn Around the fortunes of the MSME Sector
Women constitute a large untapped talent pool of entrepreneurs and workers. The following avenues can enable women entrepreneurs and workers to find better and bigger opportunities with India's MSMEs:
● Connect Womens’ Entrepreneurial Spirit to Market Access
Only 14% of India's MSMEs are woman-led and women account for only 24% of the MSME workforce. B2B commerce platforms and marketplaces can enable women entrepreneurs to access new opportunities. E-commerce platforms not only make the constraints of social distancing redundant but also enable more flexible time management opportunities. Enrolling in these marketplaces can enable women entrepreneurs to explore new demand trends, opportunities, and buyers for their goods.
● Enable Digital Empowerment of Women
Women adapt easily to digital workflows. When most of the enterprises across the country were yet to figure out a way to shift from onsite to online modes of business, work, and collaboration, 2.5 million Anganwadi workers who have been at the front lines of driving healthcare for communities responded with agility to the Ministry of Child Development's online training sessions. Empowering women with digital collaboration skills will allow our MSMEs to reduce brick and mortar infrastructure costs for sales offices and stores. It will also allow women workers to work from anywhere and have adequate opportunity to develop work-like integration.
● Connect Women Entrepreneurs to Digital Credit Platforms
80% of female entrepreneurs in India lean on their personal resources for financing their businesses with only 14% women-owned enterprises being able to access formal credit lines. Integration with digital supply chain financing platforms will allow women entrepreneurs to create a digital payment and receipt trail in the MSME space and access new age working capital solutions like early payments from enterprise buyers, banks, and NBFCs.
Women Led Growth of India’s MSMEs
If 50% of women join India's workforce, the Indian economy can add up to 9 percentage points to the real GDP growth rate. Women’s participation in MSMEs will enable us to zero down the gap with sustainable development goals of gender equality, decent work and economic growth, reduced inequalities, stronger institutions, and strengthen the partnerships for these goals. Their participation in MSMEs will allow them to go a step further by embracing entrepreneurship opportunities and transforming into job creators who will create an Aatma Nirbhar Bharat.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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