India's startup ecosystem, the third-largest in the world, is experiencing a significant surge, with women entrepreneurs driving remarkable change. A report by IBEF highlights that women-led businesses make up over 20% of India’s MSMEs and power 23.3% of the workforce. In fact, it is expected that women-led businesses are likely to grow 90% in the next 5 years.
Yet, despite their impressive strides, many female founders struggle with limited funding opportunities, gender biases and networking hurdles. To level the playing field, financial institutions must provide tailored funding solutions, ensuring women entrepreneurs have the support they need to scale and succeed.
Bridging the Financial Divide for Women Entrepreneurs
The government has introduced initiatives such as the Bharatiya Mahila Bank Business Loan, Dena Shakti Scheme, Udyogini Scheme and Pradhan Mantri Mudra Yojana (PMMY) to provide much-needed financial backing for women-led businesses.
Furthermore, the Union Budget 2025 announced a transformative scheme offering term loans up to ₹2 crore for first-time women entrepreneurs, including those from SC/ST communities. This initiative aims to empower 500,000 new businesswomen over the next five years, fostering inclusive economic growth and reducing financial barriers.
With tailored financial solutions like SIB GSTPower Business Loan, women entrepreneurs get access to same day sanction, flexible repayments, easy documentation and a concession of 50% on processing fee. Success in business begins with the right financial support!
Why Financial Institutions Must Think Gender-Smart?
Financial institutions can play a crucial role in supporting women entrepreneurs by offering tailored solutions. This includes offering collateral-free loans, lower interest rates and mentorship programs that enhance financial literacy.
Encouraging financial institutions to prioritize lending to women, launching digital literacy campaigns and streamlining loan application processes can help women have access to the right financial resources and can scale their businesses confidently. A well-structured, gender-smart financial ecosystem will drive innovation and a more empowered entrepreneurial landscape for women across India.
As India races towards a $5 trillion economy, women’s participation in finance will be a game-changer. Equal representation of women in the formal economy could boost India's GDP by 60%, contributing an additional $2.9 trillion by 2025. By ensuring equal access to credit and policies that support women-led businesses, we can create an economy that is sustainable and inclusive.
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Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.