The Missing Middle: Bridging the Gap of Financing Needs for Women Owned SMEs in India

Abstract

 Globally, a woman in entrepreneurial activity share is lesser as compared to men, with little  progression over time. The gap in early stage entrepreneurial activity rate between men and  women is highest in India in comparison to other BRICS nations (GEM, 2014). The Gender GEDI  Index has ranked India’s second to last, behind Egypt and Morocco out of 17 countries. Women  owned businesses in India are undercapitalized with a financing gap of Rs. 6.37 trillion with 73%  of the total finance demand among women owned business in India remains unmet. (IFC report,  2013).The gender gap in entrepreneurial activity and capitalization can be because of different  economic, financial and socio-cultural factors effecting the business environment for entrepreneurs.  Lending to women-owned micro, small, and medium enterprises (MSMEs) is still not explored as  compared to lending to MSMEs in India. Due to absence of segmental focus and with greater  perception of risk, formal financial institutions have not contributed much to understand this  segment. For growth and development of nation it is mandatory to bridge the credit gap for  women-owned SMEs across the developing world.