About 70% of the
funding needs of women-owned enterprises remain unmet, reveals an IFC study
Women have a harder
time raising funds for their business than men, according to a report by the
International Finance Corporation (IFC), a World Bank arm.
The gap in financing
women-owned enterprises has been pegged at a whopping Rs. 6.37 lakh crore 73% of the total demand.
Significantly, the
report noted that there is empirical evidence that women tend to be better
borrowers and customers, thus providing “value” (in terms of better credit
quality, comprehensive banking relationships, and enhanced profitability) to
their partner financial institutions.
According to IFC, the
total funding requirement of women-owned enterprises in India, using 2012 data
as a base, is about Rs. 8.68-lakh crore, which includes both debt & equity.
The total formal
finance extended to women-owned enterprises in 2012 was Rs. 2.31-lakh crore,
said the report, ‘Improving access to finance for women owned businesses in
India’.
More than 90% of
women-owned enterprises in India are self-financed and represent nearly 10%of
all MSMEs (micro, small and medium enterprises) in India. Collectively, they
contribute 3.09% of industrial output and employ over eight million people.
While 78% belong to
the services sector, almost 98% of them are micro-enterprises.
The report said that
although funding needs of women-owned enterprises are not radically different
from those of male-owned businesses, financial exclusion is at a higher level
due to a combination of factors.
The constraints women
entrepreneurs face include limited awareness and understanding of financial
products/services; lack of collateral; and lack of confidence to approach
financial institutions
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