How to Bridge The Systemic Divide

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A steadily growing tribe of women entrepreneurs in India have been marking their identity, across domains and industries

Currently, women’s economic empowerment interventions are not enough to overcome all obstacles facing female entrepreneurs

Attracting funding is thus in part about relationships and trust. For women to break into this circle of trust requires a change in mindset and behaviour from all participants – male and female

Entrepreneurship is an important driver of economic growth, and it provides economic opportunities for women (and men) everywhere.

The increasing presence of women as entrepreneurs has led to significant business and economic growth in the country. Women-owned businesses are playing a prominent role in society by generating employment opportunities, bringing in demographic shifts and inspiring the next generation of female founders. Women entrepreneurs represent about one in three growth-oriented entrepreneurs active in the world today. 

The concept of an entrepreneur has historically been that of a male, and in essence, the role and identity are masculine in the image and expected behaviour.  We must consider aspirations to explore what women want to create or achieve, behaviours to look at how they create and grow businesses, and confidence to relate to the ‘why’, considered as their trust in themselves and their degree of self-assurance. Together, these concepts shape and enhance a woman’s identity in the entrepreneurial process.

A steadily growing tribe of female entrepreneurs in India have been marking their identity, across domains and industries. From conventional woman-friendly enterprises like cottage industries to new-age startups, women have started holding the reins everywhere. 

Insufficient Interventions

Currently, women’s economic empowerment interventions are not enough to overcome all obstacles facing female entrepreneurs. The emerging evidence from psychology and experimental economics on agency, mindset, and leadership show that, for successful interventions to be transformative, they need to move beyond basic access to financial and human capital and tackle central psychological, social, and skills constraints on female entrepreneurs. 

Emerging evidence from recent studies on different capital-based, training-based, and gender-based interventions, using randomised control trials, present promising interventions to support women entrepreneurs.

From the neighbourhood aunt who runs a beauty parlour to a teacher who conducts a tuition centre from home  —  we’ve all seen women spearheading businesses. However, for years they had to contend with these small, informal, work-from-home businesses.

The challenges of breaking into the formal business sector are aplenty. Here are a few of the most common problems women face in India while setting up an entrepreneurial project:

  • Family ties, homemaking, and child-rearing responsibilities
  • Lack of support from family members, who want women to choose “secure and safe” jobs
  • Old-school lending institutions question the credibility of women, even though the loan repayment rate for them is higher than that of men
  • The red tape and tangles of bureaucracy
  • And a patriarchal society that makes it difficult for women to compete with their male counterparts

But, then in the last few years, with digitisation, liberalisation, and growth of ecommerce and social networks, plenty has changed. Today, a vast majority of startups in India are either run by a team of women or have a female cofounder.

Wage & Networking Disparity

Narrowing significant discrepancies in earnings between female and men entrepreneurs is no small task. However, study findings show that ecommerce tools play a pivotal role in closing the revenue gap and increasing the earning potential for female entrepreneurs. 

In fact, female entrepreneurs using ecommerce tools reported earning 75% more than female peers who do not sell online. Increased access to capital was also highlighted as a revenue catalyst, yet access to funding remains a barrier.

The biggest obstacle to funding and growing any business is access to capital. Despite evidence that women tend to have better repayment records than men, they face higher barriers in this regard. These disparities are the result of the complex interaction of factors, including the way private equity works, the way financial institutions operate, and the behaviour of women themselves. 

For instance, private equity financing entails extensive use of intermediaries. Women tend not to be strongly entrenched within the relevant investor networks. Lacking exposure to the world of private equity, women tend to structure their projects differently from men, which may affect their ability to attract capital. Men and women also have different styles in “pitching” for funds

Attracting funding is thus in part about relationships and trust. For women to break into this circle of trust requires a change in mindset and behaviour from all participants – male and female. Women need to think bigger, ask for more, and seek out appropriate network relationships. 



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