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How Business Loans For Women Are Helping Break Social Stereotypes

While the goal of increasing female entrepreneurship in industrialised countries and generating employment achievable, it will require a revolutionary and systematic approach to encounter the challenges faced by potential entrants and existing women entrepreneurs.

In India, out of all the businesses, 14% are owned by women entrepreneurs. Most of these businesses are still on the micro-scale in the MSME sector and fail to become medium or small enterprises because of the lack of easy access to capital from banks or from NBFCs. Admittedly, most lenders haven’t necessarily made it easy for women to access loans, but some socially conscious finance companies like Kinara Capital provide special business loans for women. HerVikas by Kinara Capital is an initiative aimed at promoting womens’ entrepreneurship in India. Women get an upfront discount when availing of business loans for women.

Business Loans For Women

Let’s understand why it’s important to provide quick and easy business loans for women and promote womens’ entrepreneurship:

  • Women entrepreneurs in India play an important part in the country’s economic development. They jointly provide 3.09 % of industrial output and employ 10% of all workers engaged in various economic activities in India (6th Economic Census, 2016).
  • MSMEs suffer more operational and growth constraints than larger businesses, which stifles their growth. Access to easy business loans for women and the cost of financing has been cited as important roadblocks to MSMEs reaching their true potential.

Barriers for women entrepreneurs in general 

  • Women in our society are susceptible to discriminatory behaviour, which creates a significant barrier in the financial world. Therefore, the Beti Bachao, Beti Padhao Yojana was introduced in India as a strategy to combat patriarchal limitations imposed on women through education.
  • Many Indian women are in charge of child-rearing and maintaining their households. Hence work-life balance becomes a struggle.
  • Most Indian women have limited access to investment since they are unlikely to have a property in their names.
  • The most significant cause of women’s socioeconomic troubles is illiteracy.

An entrepreneur’s ability to develop their business can be hampered by the lack of education. Unfortunately, a large percentage of ambitious women entrepreneurs in India lack adequate education. Hence getting business loans for women becomes difficult. 

Barriers to secure financing for women entrepreneurs 

  • Survey findings suggest that women entrepreneurs‘ lack of access to capital is mostly due to their propensity to run small, informal enterprises.
  • Women’s lack of access to capital is often because lenders think they are not ambitious and capable enough to manage a business.
  • Whether the notion of higher risk is based on facts and experience or conjecture, creditors will be hesitant to lend to women’s enterprises if they are regarded to be riskier, higher, and likely to yield poorer returns. 

HerVikas by Kinara Capital

Kinara Capital is an RBI-registered NBFC that aims to promote financial inclusivity. They offer various financial products to MSMEs that can give a boost to women’s businesses. For instance, the HerVikas loan scheme by Kinara Capital, which is offered exclusively to women entrepreneurs. HerVikas gives an upfront discount on business loans for women and does not require any property collateral. One of the most difficult challenges for a woman entrepreneur looking to expand her business to overcome is obtaining money in a timely manner, and such NBFCs are taking strong initiatives to ease and facilitate the process of business loans for women.

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