Gender Bias, Low Digital Literacy Hindering India's Women-led MSMEs: Nasscom Foundation's Bhasin

In India, significant obstacles such as gender bias, lack of digital literacy and balancing work and family responsibilities are hindering women-led micro, small and  medium enterprises (MSMEs) from fully realising their potential in this industry, said Nidhi Bhasin, Chief Executive Officer (CEO), Nasscom Foundation in an interview with BW Businessworld.

"While there is a growing presence of industry bodies, NGOs, and women empowerment councils dedicated to empowering women entrepreneurs, access to technology and digital literacy remains a key hurdle, especially in the rural areas," she stated. Edited Excerpts:

Let me start with a simple yet very important question. What is the current status of women entrepreneurs in the MSME sector? Is India doing enough for them as they continue to face issues while accessing formal credit and of course never-ending delayed payments?

The current status of women entrepreneurs in the MSME sector in India is marked by resilience and growth. Despite challenges such as gender bias, lack of digital literacy, and balancing work and family responsibilities, women-led MSMEs have demonstrated remarkable recovery and adaptation to market changes.

The participation of women in the MSME sector in India has seen significant growth in the past three years, reflecting increased efforts to support women entrepreneurs. According to the Ministry of MSME, the percentage of women-owned MSMEs registered on the Udyam Registration portal increased from 15.67 per cent (2015-2020) to 19.43 per cent (2020-2023). From an industry perspective, these figures indicate a positive trend towards gender inclusivity in the MSME sector, contributing significantly to economic growth and social empowerment.

Our country has made significant efforts to support women-owned MSMEs through initiatives like the Pradhan Mantri MUDRA Yojana and Stand-Up India Scheme. These programs have enabled women to access finance for setting up their own businesses. Additionally, the government has recognized the importance of empowering women entrepreneurs through enhanced credit access, which has led to a significant increase in the number of women-owned MSMEs.

Driven by increased important factors such as access to finance, technological advancements, and supportive government policies, women’s participation in the MSME sector in India is witnessing a positive shift as they take the leap into business ownership and promote empowerment.

How is technology simplifying compliance processes for women entrepreneurs in the MSME sector? Can you provide examples of specific technologies or tools that have been particularly beneficial for them?

Integration of technology plays a crucial role across all industries and is proving to be a game-changer for women entrepreneurs in India's MSME sector. One of the primary hurdles women face in this sector is navigating the complex regulatory framework and by leveraging the upgraded latest digital tools and platforms, women can overcome traditional limitations, comply with regulations and unlock new avenues for growth. 

It equips women entrepreneurs with vital tools to surpass conventional barriers, fostering a more equitable and accessible environment. Digital tools like online registration portals and compliance software are extremely helpful in streamlining paperwork and complying with legal assistance and the Udyog Aadhaar portal makes it easier for them to formalize their businesses and tap into government support programs.

Additionally, various digital platforms and technical modernisation have allowed marginalised women to fully access and understand government schemes, understanding social media and the exposure it brings with it helps in transforming their lives and fostering economic and social inclusion. Hence, this enables women entrepreneurs to concentrate on their core business activities without unnecessary obstacles.

What are the major challenges faced by women entrepreneurs in adopting technology for compliance? Do you think that these challenges are being addressed to ensure smooth technological integration? If not, why?

The rise of women entrepreneurs in the MSMEs has been increasingly notable in recent years owing to government policy support, increased awareness, digital evolution and improved financial assistance.

Despite all of this, significant obstacles continue to hinder women from fully realizing their potential in this industry. While there is a growing presence of industry bodies, NGOs, and women empowerment councils dedicated to empowering women entrepreneurs, access to technology and digital literacy remains a key hurdle, especially in rural areas. Moreover, as business operations and compliance increasingly move to digital platforms, women entrepreneurs in rural or underdeveloped areas may face challenges due to limited access to technology and digital literacy.

Additionally, crucial factors like limited access to financial support, lack of awareness about regulations, inadequate technology skills, unclear understanding of scheme features and their relevance to challenges, and points of access significantly contribute to the gender gap in economic opportunities.

Other obstacles include difficulties accessing credit, as numerous women entrepreneurs face challenges meeting the Stringent collateral requirements set by financial institutions. Moreover, societal expectations often depict women primarily as caregivers, which restricts their time and mobility, limiting their ability to fully commit to their businesses. The lack of strong mentorship and networking opportunities further isolates them, leaving them without the essential guidance and support needed to navigate the business environment successfully.

However, with strong support from the government and its policies, digitisation and growing awareness, the MSME sector is set to witness a major shift, with women dominating the workforce in this sector as well as shaping and enhancing the future of the country.

Can you describe the key initiatives Nasscom Foundation has launched to support women-led MSMEs from marginalised sectors? What specific strategies are being employed to help these enterprises come online and expand their businesses?

Empowering women in technology forms the very cornerstones of most of our programs including the Women Entrepreneurship Program and Social Innovation Program. The Women Entrepreneurship Program has empowered over 1,00,000 rural women entrepreneurs to leverage online platforms such as YouTube, Pinterest, Instagram and WhatsApp Business to promote their products, access relevant government schemes, and reach a wider audience to enhance their businesses. 

Our Social Innovation for Youth (SIFY) Programme has witnessed a rise in women-led startups, with 37 per cent of learners being women. The programme aims to foster creativity, curiosity and hands-on experiences with cutting-edge technologies. Through the Innovation Spaces, students, particularly women, have access to state-of-the-art technologies and guidance from experienced mentors, helping them unlock their potential and turn ideas into tangible solutions. 

What are the challenges you face while helping Indian MSMEs? What impact has Nasscom Foundation's support had on the growth and sustainability of women-led MSMEs so far? Can you share any success stories of women entrepreneurs who have significantly benefited from these programs?

Regulatory: The majority of MSMEs face challenges in their initial stages due to an excessive number of rules and regulations. Obtaining an MSME loan, enforcing contracts, and obtaining building permits often discourage entrepreneurs from starting businesses

Lack Of financial knowledge: Various MSMEs lack knowledge in handling the finances of their organization and decisions related to MSME loans

Technological Advancements: Lack of experience and knowledge, many MSMEs may not have access to the latest technology advancements in the industry causing a lack in productivity and faster business growth

Absence Of Policies: With just a few policies in place for small and medium enterprises, MSMEs growth and development lack consistency and clarity

Poor Infrastructure: India's MSME sector, especially the outsourcing industry, thrives on a robust infrastructure. However, inadequate infrastructure undermines their operational efficiency and limits their growth potential.

Through our collaboration with organizations such as L&T Technology Services, Gen and BNY Mellon, we have empowered rural women entrepreneurs enabling them to participate in the digital economy, use technology for promoting their enterprise, and improve their personal abilities, business outcomes, and future readiness. These initiatives have significantly enhanced their digital and financial literacy, helping them to establish their businesses. 

Moreover, she also learned to use e-commerce platforms and digital payment apps like Google Pay and BHIM SBI, which opened up new opportunities for her to organize and participate in online meetings, helping me overcome geographical barriers and connect with customers from anywhere.

As India is eyeing to become a developed nation by 2024, experts say it is not possible without women's participation in India's active labour force. How can governments and organisations improve their support to maximise the potential of women-led MSMEs?

India's economic terrain is witnessing a notable transformation, where small businesses, particularly MSMEs led by women, are emerging as crucial catalysts of growth. This shift not only fosters economic advancement but also promotes gender equality and social inclusion. Approximately 14 per cent of India's MSMEs are owned by women, totalling around 13.5 to 15.7 million businesses. 

These women-led small businesses have the potential to boost empowerment, create jobs and promote overall inclusive growth, however, the government and other stakeholders can build upon this momentum through a progressive approach aimed at prioritizing the digital transformation of the women-led MSMEs

Access To Financial Resources: Ensuring fair access to capital, loans, and financial services to empower them in expanding their businesses.

Skill Development And Training: Offering training programs and capacity-building initiatives to enhance women's entrepreneurial skills, including digital literacy, business management, and marketing.

Mentorship And Networking: Creating mentorship programs and networking opportunities to connect women entrepreneurs with experienced mentors, peers, and industry professionals who can provide guidance and support.

Policy Support: Enacting supportive policies and regulatory frameworks that address gender disparities, promote women’s entrepreneurship, and incentivize gender-inclusive business practices.

We bridge this crucial gap for women entrepreneurs by building strong alliances and partnerships between government agencies, non-profits, MSMEs, industry leaders and small and medium-sized businesses at all levels, creating a network of support that empowers women to succeed. Thus, by adopting a holistic approach coupled with digital transformation and these measures, we can create an inclusive ecosystem where women entrepreneurs can flourish and propel women-owned MSMEs to new levels of success.