Recommendations to Facilitate Women Entrepreneurs through Start-up India Plan

What are the challenges faced by women led start-ups?
Woman constitutes the family, and thereby weaves the soul of any society and the nation. Female entrepreneurs make significant contribution to economic growth and poverty reduction. The Government of India has defined women entrepreneurs as―”an enterprise owned and controlled by women having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of the employment generated in the enterprise to women”. Gender gap & lack of institutional funding are serious issues that plague the start-up ecosystem & business community alike. Existing social structures& stereotypes make it extremely tough for women to open a company in India. Moreover, most of the women led start-ups that raise funds are mainly confined to metros whereas there is a serious lack or absence of female centric ventures in smaller towns & cities. Sometimes, it is even difficult for women to open a bank account & secure loans; and even if capital is available, legal & regulatory framework become the bottlenecks. Even if women own & operate a venture, they find it difficult to generate employment for other women; therefore the potential is seldom realized.

Women are faced with several challenges as they step out to make a mark in the entrepreneurial ecosystem. What becomes crucial for women while looking for investors is to detach their gender from their dealings and conversations and prove to the investors that they are committed to the idea, letting the product speak for itself, else investors lack interest merely on the virtue of the entrepreneur being a woman. This fact is palpable on looking at the statistics which shows that, globally, women-led businesses don’t have adequate funding. The essence of “women conversation” in this country has been either about the grassroots or women in boardrooms and leadership, neglecting the large urban middle-class women. A majority of the budding women entrepreneurs come from this very segment. Moreover, those women who are able to establish their foothold in the start-up industry initially, are generally faced with financial problems in the future as they lack Series B and Series C funding.

Yes, statistics prove the point!
The 2015 Gender GEDI Entrepreneurship Index ranks India at a dismal 70 out of the 77 countries with a score of 25.3 per cent. This index measures a country’s potential to encourage and fuel the development and growth of female entrepreneurship. India also received the lowest score in terms of Labour Force Parity on an institutional level.In the first half of this year, Indian start-ups have raised $3.5B funding. In fact, start-ups had raised USD 1.7 billion in Q1 2015 alone. The number of deals in Q2 2015 has increased by 50 per cent from the previous quarter. However, when we look at businesses with women at the helm —startups founded and run solely by women, the number is small and if we talk of the ones who have received funding, it does not even cross single digits.Looking at this disparity, private funding platforms for women, like Saha and Female Founder’s Fund originated.

Start-up India Should Facilitate? How?

  • It is time we integrate the gender perspective to all relevant policies and initiatives, to promote equality between women and men. For instance, if the government has recently announced aRs 10,000 crore fund for entrepreneurs during the release of the action plan for the Start-up India campaign, it can consider allocating a percentage of this fund only for women entrepreneurs. This would definitely help in encouraging and growing the number of women entrepreneurs in our country.The Micro Units Development and Refinance Agency Credit Guarantee Fund (MUDRA CGF) assumes security for loans extended to small entrepreneurs. Stand-up India CGF will also stand guarantee for 10 lakh to Rs 1 crore loans to be provided to at least 2.5 lakh SC/ST and women entrepreneur by every bank branch, including private sector. Along with this, the Government has allocated Rs 500 crore for SC, ST and women entrepreneurs in the Budget under the Stand-up India Scheme. These are welcome steps.
  • A few steps could be incorporated in boosting women entrepreneurship in the country. There should be more Non-Profit Organizations dedicated to women. Organizations which are dedicated to improving the social and economic future of women can prove to be a tremendous resource. These groups can provide mentoring and networking opportunities, educational scholarships and funding for women to start their own businesses. For instance, as a progressive step, the Women and Child Development Ministry is planning to create a national-level advisory council for women to advice government on the issues related to their entrepreneurship which includes work timings, unorganized sector and similar issues. The council will emerge from the Ministry’s online platform called ‘E-MahilaHaat’ launched recently to promote women entrepreneurship. Women will be voted on the website and the districts or states with highest votes will form the council. Such moves can prove to be a boon for these budding women entrepreneurs.
  • In addition, Small Business Mentoring Organisations can be developed as successful entrepreneurs and business people are a tremendous resource for mentoring. They can also be given the option of online websites for sharing their knowledge. They can be a great reference point for all business owners and a source of funding.
  • Corporate Grants by foundations that focus on the economic stability of women can be a tremendous resource for financing. Such funding can help more women entrepreneurs bloom as well as help secure financial independence. For instance, in the U.S., baby supply company Huggies ( offers the MomInspired Grant program to help women to develop a product or start a business. As of publication, the award amount is $15,000. Eligible concepts do not need to be related to diapers or baby supplies but should focus on children aged newborn to six as well as pre-natal care. Similar steps could be taken for attracting Indian women entrepreneurs.
  • Moreover, the concept of entrepreneurship should be introduced to the girls at a young age. Programmes can be conducted to encourage the entrepreneurial spirit in young girls which can help inspire a future generation of business owners. Women consumers in India are far under-served. Being a customer themselves, the articulation of a business idea and the product behind that is perhaps easier for women to understand and make. So just by virtue of having this huge under-served consumer segment, women-owned businesses that cater to this segment form a very large space to catch up. While investors in urban locales are now showing keen interest in women led businesses, microfinance can be a good solution for rural areas.
  • A start-up network should be created, with equal representation for men & women leaders, to come together, share their experiences as well as support each other through various means.Such steps can prove to be an effective step for co-operation among fellow entrepreneurs as well as a great source of information on the technicalities of entrepreneurship.
  • Lastly, the government should rope in the top B-schools to introduce special workshops and programs to provide entrepreneurial education, training, support & networking platforms to women who are keen to start their own business.

The Startup India Action Plan has undoubtedly proved to be the beginning of a whirlwind of change in Indian entrepreneurship. However, its policies need to be all-inclusive and far-reaching for it to turn into a potent eventuality. A gradual approach is necessary, which must be a co-operative effort not only by the government, but also by the capitalist class and the educated youth. This new vision must be realized to break the vicious circle that entangles the women in our society.

This piece is the fourth in the series of articles published at the conclusion of a policy review project on PM Modi’s Start-up India Plan undertaken by Praneeth Rao, Vaibhav Goyal, Agrima Singh and Simrat Singh.


IPAN Research Team

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