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Gender disparity exists in MSME schemes by govt; no special scheme for women entrepreneurs, says expert

Credit and Finance for MSMEs: The existing schemes by the government for MSMEs don’t focus on women entrepreneurs much as there is significant gender disparity in such schemes, particularly for financing MSMEs, said Shashi Singh, Chairperson at Consortium of Women Entrepreneurs of India (CWEI), a not-for-profit firm working to promote women in business. Singh, who is also a member of the National Board at the Ministry of MSME and a member at the United Nations Environment Assembly, told FE Aspire that government should analyse why women are not being able to benefit from such schemes even as banks must reduce the interest rate to boost lending to women entrepreneurs

“At least during the post-Covid period, banks should reduce their interest rates so that more women can come forward and churn out significant profits in business in order to repay banks. If there isn’t enough profit, how will they repay banks? That’s (low credit access to women entrepreneurs) the reason women in small industries are not growing at the level we would like them to,” Singh said.

Importantly, there is no dedicated central government scheme for existing women MSMEs at the growth stage seeking collateral-free capital to expand their business. While Stand-Up India scheme by the central government, launched by Prime Minister Narendra Modi in April 2016, focuses on women entrepreneurs, it also caters to scheduled caste and scheduled tribe entrepreneurs. Moreover, it focuses on entrepreneurs looking for setting up a greenfield enterprise (first-time venture to be set up by the beneficiary) instead of lending to existing and growing enterprises.

“Women entrepreneurs in India have been resilient in growing their businesses without much government support. There is no special scheme helping women stand on their own feet, especially after Covid,” said Singh.

To enable women entrepreneurship, Singh noted two key asks from the government; first, having a separate department for tiny and micro units with a dedicated focus as 90 per cent of women entrepreneurs belong to the micro segment. The second suggestion was around the cluster formation of businesses owned by women entrepreneurs. 

“In Delhi itself, many industrial areas are not in the main city. There is nothing called a shared area for women entrepreneurs. We are asking this from the Delhi government at least so that women can work together in a cluster of their own and make eco-friendly products that can be purchased by the government as well,” said Singh.