The number of female-led MSMEs in India has grown from 2.15 lakh to 1.23 crore in just a decade. However, they face a financing gap of $158 billion and largely rely on informal sources, according to a survey by Indifi Technologies, an MSME lending platform, titled “Understanding what women-led MSMEs want “.
The survey was launched to understand the needs and challenges of women-led businesses and enable greater inclusion in the lending space to enable them to thrive and grow.
The survey involving more than 250 women entrepreneurs found that obtaining capital remains the biggest challenge they face in terms of running a business, followed by managing business operations and obtaining finance. a credit period with vendors/suppliers. Expanding on these barriers further, respondents were of the view that starting and scaling up their business is difficult for women SMEs, with raising the required capital being the common denominator at every stage. 61% of respondents also believe that lack of experience in business and finance contributes to this.
To address some of the challenges, most entrepreneurs said they still depended on banks for their financing needs; but years of business activity, poor credit history and lack of property are the main obstacles to sanctioning their loans.
Siddharth Mahanot, Co-Founder and COO, Indifi Technologies, said, “At the heart of Indifi’s operations is the goal of fostering the financial inclusion of MSMEs in the lending ecosystem; allowing them to thrive and grow their business. A significant volume of our loan disbursements goes to women entrepreneurs, but we are aware that there is still a significant credit gap to fill. This survey aims to decode the nuances of the unique challenges women entrepreneurs face. »
To fill some of the gaps and foster the inclusion of creditworthy but underserved businesses, Indifi has enabled accessibility to credit through its verticalized and ecosystem-based approach by partnering with leading technology aggregators such as Amazon, Flipkart, Zomato, Swiggy, Google Pay, FirstData and Banks & NBFC as lending partners. By leveraging alternative datasets available in these leading tech aggregators, Indifi mitigates underwriting challenges and improves access to capital for micro-MSMEs.
To further support women-led MSMEs, Indifi recently partnered with Facebook in their Small Business Loan Initiative, which provides a 0.2% interest rate reduction to women-owned businesses.
The survey further revealed that in terms of exploring digital lending alternatives, respondents believe that lack of awareness and technical know-how is the reason why digital lending is not commonly explored as avenues. credit among other women entrepreneurs.
Decoding intersectional challenges through the lens of gender; 45% of female entrepreneurs believe that having a male co-founder makes it easier to run the business. They also shared that the top three attributes a male co-founder brings to the table in a business are managing a team, interacting with suppliers and customers, and securing capital/funds.
Women entrepreneurs showed some comfort in using digital tools and the main use of digital technologies in their businesses was for online banking, followed by social media marketing and the use of online marketplaces. line. According to Indifi’s own customer base findings, 50% of loans to women SMEs come from the e-commerce, travel and restaurant segments that rely heavily on digital technology for their operations.
The survey received input from a diverse set of entrepreneurs at different stages of their business. The majority of respondents were between 31 and 50 years old, and a large proportion of respondents had been operating their business for 2 to 4 years.
Of the more than 41,000 loans granted by Indifi in more than 400 cities, 20% are women entrepreneurs, of which 25% are first-time borrowers and 25% are from Tier II, III, IV cities.