BENGALURU: Only three per cent of women entrepreneurs in Tier 2 and 3 cities in India have access to external funding such as bank loans or equity investments, to start or expand their businesses, according to a white paper published by the Reserve Bank Innovation Hub (RBIH), in collaboration with SALT-mysaltapp. The paper highlighted the perils of women entrepreneurs and lack of a level playing field in the industry.
Titled ‘At the Helm: Women Entrepreneurs Transforming Middle India’, was aimed at understanding the complex socio-economic dynamics affecting women’s entrepreneurship in Middle India, defined as Tier 2 and 3 cities. The study was conducted with the participation of 300 women across 30 cities, with a focus on businesses with a track record of at least three years and employing more than 10 people. In all cases, the women interviewed were either founders themselves, or playing a full-time, decision-making role in the family business.
The paper found a severe information gap due to the lack of gender-disaggregated data. This becomes crucial to counter stereotypes, create interest in this segment and make effective policy interventions based on data. The study noted that given the country’s achievements in high STEM and postgraduate education for girls, this trend is baffling.
Optimistically, the paper found that the sample is a diverse batch of educated women entrepreneurs with 14% holding graduate degrees and 55% having pursued higher education, indicating a wide range of professional backgrounds. However, due to many other responsibilities, many entrepreneurs are between the age group of 30 and 60 years, underscoring that women have late success.
“There is also a noticeable trend that cities deemed safer for women see a higher propensity for them to take entrepreneurial risks and establish businesses. Enhancing women’s safety can directly contribute to fostering a more vibrant entrepreneurial ecosystem,” suggested the 52-page report.
There is an urgent need to address and create gender-responsive policies for Tier-2 and 3 cities which includes education, capital, skill development and strong community networks convergence for an inclusive and prosperous entrepreneurial landscape in the country.
“Fostering female entrepreneurship in Tier 2 cities can be a gamechanger. The ecosystem is primed, and the diverse range of businesses women are currently running shows promise. In addition to being groomed locally, female talent also moves into these cities as part of marriage-related migration. As more women acquire higher education, they are ready to consider entrepreneurial careers which need to be encouraged,” concluded the report.