Women’s entrepreneurship can lead to creation of 30 million women-owned enterprises in India

“Despite improvements in social parameters, India’s growth does not translate into the economic inclusion and development of women,” reads a report by Googleand Bain & Company released in February 2020. While it is a discouraging revelation, it also points out that women’s entrepreneurship can help advance the cause of financial inclusion of women in the country. 

Fuelling entrepreneurial spirit and providing necessary support to women entrepreneurs hold the promise of changing the economic and social trajectory of India and its women for generations to come. 

HerStory speaks with women entrepreneurs and investors, the key players on the ground and looks at how women entrepreneurship is faring in India.

Where are we now?

According to the Google and Bain & Company report, 13.5 to 15.7 million women-owned enterprises make up 20 percent of all the enterprises in the country. This is a rise from 14 percent to the current 20 percent over the last decade. Despite the growth, several constraints restrict women entrepreneurs from reaching their full potential. 

Neha Bagaria, Founder of JobsForHer, affirms that there is a dearth of women entrepreneurs in the country.

“A major shift in mindsets is needed to create suitable conditions to facilitate and encourage women entrepreneurs as current networks are heavily dominated by men, and it, therefore, becomes intimidating and difficult for women. There is also a need to create greater accessibility to financial services and nurture supportive entrepreneurial conditions for women,” she says. 

According to the Female Entrepreneurship and Development Index (2015), India performs sub-par with a rank below the 20th percentile in the female entrepreneurship index. This rank is worrying because not only does it lag far below the developed markets like the US and UK, but also the developing countries like Brazil and Nigeria. 

Further, several women-owned businesses in the country are owned by women only ‘on paper’. According to Bain’s calculations, the total share of enterprises that are truly owned and run by women is likely to be lower than 20 percent of overall numbers. 

Cultural practices and responsibilities of being primary caregivers also impede women from taking full control of their work. Financial restrictions, access to credits, problems in raising funds, personal commitments, and more stand in the way of women. 

“Even though we are moving forward to be more inclusive, cultural thinking frequently inhibits women’s inclusion. There is a level of implicit bias that we as a society have, men and women included, and we need to try to go against that trend. The efforts for women’s development and inclusion that are there in intention, don’t necessarily translate because of the implicit bias we have grown up with,” says Karishma Kewalramani, Founder of vegan beauty brand FAE beauty. 

She believes that a society where men and women share the load, at home or in the workplace, will allow women to experience absolute inclusion and equality.

Besides managing professional and personal life, another obstacle that women face often is conditioning, says Karina Shah, the Bengaluru chapter head for SoGal Ventures, a women-led millennial venture fund. 

“I would say the conditioning is not right or “womanly” to state your point of view openly. It is considered loud, brash, and disrespectful. But for a man, even if he makes no sense, he is considered strong and smart,” she adds.

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A HerStory’s Women Entrepreneurship in India report published in 2019, reveals that funding raised by all-female founding teams in India in 2018 was an abysmal 0.63 percent of the total $13 billion raised by entrepreneurs in the ecosystem. 

Several women founders have shared their experience of facing investor bias, sexist comments, and intrusive questions. Investors would not take them seriously and often question their commitment to the venture, citing marriage and other familial commitments. Such instances prove that women founders have a tougher time getting funding than their male counterparts. 

At the time of the report, Ghazal Alagh, Co-founder of new-age beauty products brand Mamaearthtold HerStory,

“Verbally, you will find most investors talking about having a better diversity ratio or funding more female-led startups, but their portfolios still don't walk the talk. I think they need to be a little more proactive in correcting these ratios and not worrying about our maternity leaves impacting the business.”

According to the HerStory report, in 2018, only 34 companies headed by female founders raised $80 million in funding. On the contrary, 103 companies with both male and female co-founders have raised a total fund of $607 million.

Parag Dhol, who has been a venture investor since 1993 and is Managing Director at Inventus Capital Partners, believes, “In spite of the abysmally low percentages currently, I would dare say there is no overt (or covert) bias. I believe that the adjustment in the ratios is a matter of when, and not if.”

Why entrepreneurship?

Women’s entrepreneurship, if accelerated to meet its full quality and quantity, can lead to the creation of over 30 million women-owned enterprises. It can potentially transform employment in the country with 150-170 million new jobs, according to the study.

Increasing female entrepreneurship can have several advantages including increased longevity of women in the workforce and gender-sensitive innovation. “Investing in women builds economic and social prosperity by enabling a gradual social shift from high fertility, low education, and poor health to making more conscious reproductive choices, higher education, and better health for self and family,” noted the report. 

According to the International Labour Organisation, nearly 77 percent of women of working age in India are locked out of the labour market, which implies a tragic waste of human resources and talent. If all these women enter the workforce, “The world’s biggest democracy would be 27 percent richer,” according to IMF estimates. 

“It’s a work of art to see successful women today flawlessly juggling between their roles at home and work. Women are smart to reprioritise and shift focus where and when it needs. Apart from being good time managers, women have always been better multitaskers in all fields. Similar to ‘Educate a woman and you educate a generation, allow one woman to be an entrepreneur and you allow an entire nation to flourish’,” says Annu Talreja, Co-Founder of Oxfordcaps, Asia’s first branded and tech-enabled student housing company.

The way forward

The ultimate need for any venture to take off, is funds. While most investors claim that they invest in ideas, statistics reveal a skewed pattern in funding for women-led startups and businesses. However, few firms are taking the stride to bet on good ideas without letting gender determine their judgement.

SoGal Ventures is a women-led millennial venture capital firm founded by Pocket Sun and Elizabeth Galbut in 2016. Aiming to invest in diverse entrepreneurs, it focusses on funding in seed and Pre-Series A round for companies in the US and Asia. 

In an earlier interaction with Herstory, Pocket said,

“The idea is to bring young women together, get them exposure to entrepreneurship and role models, and we can all support one another to live on our own terms.”

SAHA Fund is another firm that is advancing funding for women entrepreneurs.

Additionally, entrepreneurs like Karishma and Neha Bagaria share that having a mentor’s support will go a long way in growing and building networks. “They will learn to articulate their ambitions to promote and negotiate for themselves and will work towards understanding the gaps within their skills early,” Neha adds.

The report outlines several mentorship and skill training initiatives including finance and skill development programmes led by Mann Deshi Foundation that has infused an aggregate of Rs 500 crore to 90,000 women entrepreneurs in rural areas. TiE Global’s All-India Road Show for Women’s Economic Empowerment through Entrepreneurship (AIRSWEEE) also promotes entrepreneurship among women in Tier-II and Tier-III cities in India, having enrolled 575 women in coaching and mentorship programmes across 106 cities in 20 states so far.

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At the same time, the report calls for a doubling down of these initiatives with coordination from private sectors, non-governmental organisations, and the government as well.

Education can play a critical role in helping develop women leaders and entrepreneurs. Initiatives like the University of Petroleum and Energy Studies’ Shakti Program provides scholarships to girls to pursue higher education and helps them go from the classroom to the boardroom. 

“Education across various levels is the best form of empowerment that can be extended to women to positively impact the state of their being, their status and position in the society, and build a solid foundation for their holistic growth and development. To affect this real change, we need to begin to nurture entrepreneurship in girls through education at an early stage,” says Sharad Mehra, Chairman, HERS. UPES is an endeavour of Hydrocarbons Education & Research Society (HERS), a non-profit organisation dedicated to promoting education and training in energy and allied sectors.

After all, capitalism demands that all hands, as many as possible, come together to keep the economy pumping.

(Edited by Javed Gaihlot)