Micro, small and medium -sized enterprises (MSMEs) were effective in shaping, income creation and global social assistance of India’s employment. In 2024, MSMES contributed approximately 30% to GDP. The aim is to increase this to 35% in the current current year.
This large sector also offers opportunities for many women -led businesses. The government implemented various financial plans specially designed to promote women’s participation.
However, the problems and difficulties faced by women -led MSMEs are often inadequate. Limited access to official loan and expanding credit gap continue to prevent these entrepreneurs from achieving their financial objectives.
While adequate credit usability for MSMES has long been a basic policy target for a long time, gaps between banks and beneficiaries usually continue in the implementation phase.
Women’s businesses make up 20% of all registered MSMEs in India. Despite a handful of plans aimed at promoting self -employment and financial independence, this female participation level is low.
What is more striking is that MSME led by women contribute to only 10% of the total turnover and receive approximately 11-15% of the total investment in the sector.
The graph shows the share of female -led MSMEs, the share of women employed in the MSME, the share of the investment of women -led MSMEs, and the share of the turnover of MSMEs under the leadership of women.
These figures emphasize permanent gaps of both financial inclusion and credit accessibility for women in the MSME ecosystem.
According to the reports of the Indian Industries Development Bank (SIDBI), women face significant discrimination in fund payment, about 35% credit gap – that is, more than one third of their financial requirements – compared to the 20% credit gap that men face. The graph shows the credit gap between the sexes.
The credit gap refers to the difference between the amount of loan requested by the debtor and the amount received in fact. These insufficient funds are one of the biggest challenges affecting approximately 26% for women in the MSME sector and closely follows the difficulty of competitiveness.
Launched to support individuals looking for self -employed about ten years ago, Pradhan Mantric Mudra Yojana (PMMY) enabled women to open credit accounts and finance their MSME. PMMY offers unsecured loans to MSMES, which operates in the non -farm sector.
As of 2024, women had a credit account of 42.492.281 from the account of 66,777,013 accounts within the scope of PMMY, which was approximately 64%. This shows that women constitute an important group that requires financial assistance.
However, the amount of sanctions tells a different story. A total of 5.41.012.86 Crore, allocated for the target of that year, was directed to MSME led by female -led women (approximately 41%) from Crore (approximately 41%). This inequality indicates an economic inefficiency in providing high degree of liquid, low -cost and easy accessible loans to the inadequate service area of the sector.
These low -performance plans are often forcing women to rely on non -formal credit sources that are more risky and unreliable. These challenges are not limited to MSMES; They also affect informal micro inputs (IMES) operated by women. Non -official enterprises are generally excluded from official loan processes due to legal documentation and lack of collateral.
In order to eliminate this gap, the government launched the UDYAM Assist portal, which helps it to be suitable for priority sector loans by facilitating such IMES’s official recognition.
This year, more than 1.86 Crore IME was recorded on the portal. In particular, 70.5% of them belong to women. This achievement significantly increased employment with 70.8% contribution to IMES -led IMES employment production in this segment. The graph shows the share of informal micro entries (IMES) led by women and the share of women employed in IMES.
However, although it is registered, these enterprises continue to face difficulties in accessing official loans. Professor of RV University Ashwin Ram said that there was a lack of awareness of the main reasons and limited access to official loan. “The majority of first generation of female entrepreneurs, especially in smaller towns and rural areas, have low financial literacy and are not well informed about various government plans and benefits.
There is little support to educate and help women entrepreneurs from traditional commercial banks and local government institutions to benefit from financial subsidies. “
Women entrepreneurs are generally perceived as risky debtors because they lack sufficient collateral or property ownership. In India, a significant portion of women mainly operates micro and small businesses in the unregistered sector, which determine them more than looking for finances through official institutions.
According to the International Finance Company, women should typically at least four visits to a bank to impose a loan.
In the midst of these discriminatory barriers, the Indian reserve bank reduced its repo ratio to 5.50%, the lowest since 2022, and reduced the cash reserve rate by 100 basis points. This policy aims to inject more liquidity to the economy and leave more funds to expand commercial banks to the public as loans. Both banks and female entrepreneurs are in an increasing position.
The government’s plans were initiated with strong intention, but their practices were often inadequate due to administrative inefficiency.
Data for Graphics India Reserve Bank, Press Information Office, SIDBI, NIT AAYOG, Micro Units Development and Refinance Agency Ltd. (Mudra).
B Renuka Ramakrishna joins the Hindu data team
Published – 09 July 2025 07:00
