MFIs defend an ecosystem of grassroots women entrepreneurs for sustainable progress-Sudip Bandyopadhyay

The demographic dividend is a buzzword that refers to India’s short-term fortunes. This is based on the assumption that over the next decade India will have the largest working age population in the world with over one billion people, which could translate into economic and social development. accelerated country.

The glaring assumption here, however, is that the people who make up this great powerhouse are employed productively. Obviously, since the private sector and government organizations may not be able to grow enough in this near time horizon to create jobs for these millions of people, entrepreneurship is the solution.

There are various business segments in the country and the largest in terms of number, although the smallest in terms of unit value, are women entrepreneurs in rural and semi-urban areas. According to a report by Google and Bain & Company on female entrepreneurship in India, there are today 13.5-15.7 million women-owned businesses in India. These make up only 20% of all businesses and the bulk of them consist of one person and provide direct employment to around 22-27 million people.

Unfortunately, women’s participation in Indian microenterprises is fraught with social and business factors that impact their productivity. While women run 20% of all microenterprises, a study by The Center for Sustainable Employment at Azim Premji University and the Global Alliance for Mass Entrepreneurship reveal that they accounted for 16% of this workforce and accounted for only 9% of the overall added value of the workforce. sector in 2015. Almost six years later, their share in the ownership of micro-units and added value has not increased.

Promoting entrepreneurship among women is an essential part of the overall progress India could make. This path to development does more than simply stimulate employment in the economy; it initiates social and personal transformations for women, which have beneficial effects for their families and wider communities.

However, unlocking entrepreneurship among women in India is a complex endeavor. Women’s businesses tend to be smaller and more often home-based, as women typically have to switch between work and domestic responsibilities. This, together with the fact that the category of women entrepreneurs at the local level generally does not own any assets (such as land or real estate titles or other assets that can be guaranteed), makes their development difficult.

In addition, there is a strong tendency for women to work with other women; studies have also shown that more than three-quarters of employees in female-owned establishments were women and in some states, such as Manipur and Kerala, this proportion was even higher at 91% and 90% respectively. Female grassroots businesses also often face discrimination in the marketplace, in the form of lower prices than male entrepreneurs for the same product.

Recognizing these unique constraints faced by women entrepreneurs at the local level, microfinance institutions in India adopted the Self-Help Group (SHG) model as early as 1991. This model involved offering low-cost financial services. cost to women’s self-management groups based on the group’s overall savings. Over time, this model evolved into joint responsibility group financing which was based on loans to small groups, without any collateral. These multi-pronged tools have been effective in reducing poverty, empowering women and raising awareness, ultimately resulting in sustainable development.

Microfinance, in general, has played an important role in empowering women by providing financial services to people in low-income groups, including consumers and the self-employed, who would traditionally not have access to banking services and related. It is about putting credit, savings and other essential financial services within the reach of millions of people who cannot turn to the formal financial sector because of insufficient collateral or lack of knowledge of the products and available services.

It provides women with the financial support they need to start businesses and actively participate in the economy. But more than finance, it gives them confidence, improves their status and makes them more active in decision-making at home and in the community. Long-standing MFIs even report a decline in violence against women since the inception of microfinance, according to CGAP.

Beyond encouraging gender equality, access to finance through MFIs promotes progress in the homes and communities of the women it supports. It ensures the active participation of women in business and consumption and could go a long way in realizing India’s demographic dividend over the coming decade.

Warning: The opinions expressed in the above article are those of the authors and do not necessarily represent or reflect the opinions of this publisher. Unless otherwise indicated, the author writes in his personal capacity. They are not intended and should not be taken to represent official ideas, attitudes or policies of any agency or institution.

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