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Women Entrepreneur in SMEs

Entrepreneurship is becoming a new trend in the business industry. Women are not only standing shoulder to shoulder with men, but have also started to carve out a niche for themselves in this scenario. With proper planning and execution of their innovative ideas, they are slowly becoming the leaders in their respective fields.

Be it a large firm or a small firm, women have started to compete with men in all domains of the business world. However, as entrepreneurs, they seem to be restricted by conditions and lack of opportunities or information rather than their capability. More than 97% of micro businesses are owned by women in India. Their ownership of medium businesses is negligible at 0.1%. They do not own large businesses yet. It is the small business of women that create 70% of financial demand from formal sources.



First and the most important step for becoming an entrepreneur is planning that begins with demarcating of short and long term goals. This makes execution smoother, and helps in better organization of work allowing you to chart and track your progress. It becomes very difficult and close to impossible to sustain a business without seed fund. Research says that only 30% of women-owned SMEs are sustaining rest while 70% of the SMEs owned by women in developing countries are either shut down owing to lack of resources and a strong support system by the financial institutions. As a result, $300 billion annual credit deficit to formal women-owned SMEs.



The second major hurdle that one faces is finance management, primarily categorized into two major aspects first the sources of finance and the adequate utilization of available finances. A source can be either personal savings or professional help i.e. banks or any financial institutions. Nowadays, the government too has started supporting entrepreneurship, with specific plans and schemes for women entrepreneurs. The government also believes in making the women independent by providing them with numerous opportunities. Factually, the banks are at 30-50% lesser risk in loans given to women entrepreneurs. They are also favored, as loans given to them prove to be 100% more profitable for banks, as compared to their counterparts. Yet, formal financial sources account for only 3.1% of all cases.

Adequate utilization of available finances is a tricky exercise, which required proper guidance from experts and also through personal experience. In fact, the informal financial sources account for about 75% of all financial needs of women entrepreneurs. Other resources like business television shows and online platforms/ forums can also be used to solve problems and seek help in crucial matters. Proper usage of finance cannot be done merely by seeking help from experts, but through proper research on one’s own. Ultimately, it is your plan and money that is at stake and none else can feel, think and decide about it as you can. Finance management should be smart, careful and tuned to the overall needs and goals of the business.


Achieving the Goals

The next foremost barriers are execution and achieving the business goals, which requires determined and focused approach. Keeping a track of dynamics of business industry and market helps in predicting the future beforehand just to have an upper hand. Innovative and unique ideas with proper feasibility study can earn an entrepreneur a place amidst the crowd. Women also need to build their individual identity to make their business a prodigious success. As per a World Bank study, women-led enterprises tend to be concentrated in retail and service sectors where profits and growth opportunities are lower, and rarely in more financially profitable industrial sectors such as construction, electronics or software.

Apparently, women needs to develop and possess the entrepreneurial qualities to carve a space for them and become leaders of the business industry. Urge for self- dependence and confidence towards their work would be crucial for them to reach on top. No matter how colossal the challenges are, they need to think hard, analyze, break down the obstacles and solve them systematically with a rational approach. Having a practical approach towards things and an open mind would help them to grow for future endeavours.


Author: Mr. Akash Shukla, Founder, Uprise India Initiative Foundation