Level the playing field...and now

This article was first published in leading Indian business magazine Outlook's special issue on Women's Day. Join conversations about inclusive opportunities at the Global Sankalp Summit from Apr 9-10 in New Delhi, India. Sign up here.

I want to start with a disclaimer – I am not a feminist and I, for the most part, do not support special treatment being meted out on the basis of caste, creed, social status or gender. In my career of about a decade and a half I have operated at the intersection of business and development and making the two ends of the spectrum come closer together. This is tough enough in our routine work of championing for socially-relevant businesses and enterprises, or helping the first generation entrepreneurs succeed and become investible so that they can scale their social impact alongside enterprise profitability. Now imagine championing this mandate for (first-time) women entrepreneurs in a country where the operating environment for small businesses is neither friendly nor the support ecosystem evolved enough to cater to this sub-group of entrepreneurs.

Sample this fact – In India, women-owned SMEs have a 250% higher chance of getting rejected for a bank loan as compared to men-owned SMEs. There is no single reason for this skewed statistic but several factors that contribute. These include factors such as lack of assets/ security/ collateral owned by women business owners, a near hostile operating environment for women entrepreneurs especially in sectors that have been traditionally male-dominated such as manufacturing and heavy industries or those that work very closely with the Government-sector and even the very fact that there are not enough successful precedents that allow financial institutions to have comfort in banking on women entrepreneurs.

On the other hand, if you were to pick up a sampling from the microfinance sector, the statistics are the exact opposite. Women are considered to be the most bankable, more entrepreneurial and clearly much ahead of their male peers. Anyone who has spent even an iota of time on microfinance and financial inclusion space will tell you that women are not just bankable and credit-worthy, but are 250% or more likely to return loans and there is almost a 95% chance that the loan will be appropriately utilized and will be used for productive or life-improving purposes.

So, why this dichotomy and more importantly how do we ensure that what is an established fact with women at the bottom of the economic pyramid extends even to the organized SME and business segment? So here’s my 5-point priority list of what I think needs to be set right for women entrepreneurs to get a level playing field in India:

• Comprehensive support ecosystem for women entrepreneurs: As a country we should be concerned about not churning out enough women entrepreneurs. We should be worried about the high rate of mortality of women-owned/women-operated businesses. We need to drive a joint agenda between public and private stakeholders to ensure that there is an adequate support ecosystem for women entrepreneurs. This includes building aspiration and role models for girls in formative years to being entrepreneurs and business owners; creating safe and women-friendly environments and incubators for training women entrepreneurs and nurturing businesses; building peer networks that are gender friendly and finally investing more towards business and financial training for more women entrepreneurs. I, my institution and our network of partner organizations stands firmly behind making this a mainstream agenda. At Intellecap, we convene SANKALP SUMMIT, one of the largest events focused on inclusive development, entrepreneurship and impact investing this side of the world, and have committed to bringing the dialogue and commitments around this to the main-stage.

• Role Models, Peer Group: I cannot emphasize this point enough. As the an child with a reasonably privileged upbringing, it is still tough for me to remember business-women that I looked up to while growing up. In fact, owning or running a business was never a high priority in the list of career options primarily because service sector seemed to be one that was considered more apt and secure for women, in the long-term. Times have changed, there are definitely many more examples and role models to look towards, especially when it comes to women in leadership positions in large corporates and institutions, and even politics. We cannot say the same for micro-, small- or medium-enterprises, and we need to rectify this quickly. Equally important, if not more, is the role of peer group for women entrepreneurs in the making. I have personally come across brilliant women who are small-business owners who when plugged into the right peer groups have flourished and built big investible businesses and brands.

• Dedicated financing facilities for women entrepreneurs: No woman entrepreneur worth her while asks for special concessions especially in the business space, however almost all of them ask not to be discriminated against. With loan rejection statistics as high as previously mentioned, we are clearly dealing with a deep-seated bias here. There is no scientific or logical explanation that will point to a higher degree of failure of women-owned business over those owned by our male counterparts. Clearly the challenge is somewhere else – either a bias or a genuine lack of investment/ financing-ready businesses run by women. If it is the latter, and I believe that is so, the need for establishing better ecosystems become even more acute. Our own experience at Intellecap, where we are currently working on setting up an Access to Finance (A2F) platform for women SMEs, stems from this belief and the fact that the gap between formal financing facilities and women entrepreneurs needs to be bridged fast.

• Insufficient control over finances, collateral : Thanks to deep-seated social and cultural biases prevalent in India, it is no surprise that one of the reasons banks have trouble lending to women is the lack of property, collateral or assets in their name. While the percentage of women who own property and manage their own finances is on the rise, it is still largely an urban, career-women phenomenon. Many women entrepreneurs, especially the first generation ones, struggle tremendously with the lack of total independence over their finances or having property, asset titles to their name. And while I mention this, let me also add, that even the number of women investors is woefully low. There are some initiatives such as women-focused banks and women-focused funds that are setting some early examples, but the road is still a less travelled one.

• Bridge the demand and supply gap: Women are good investments; we know that from experience and precedence. Investing in women makes for investing in households, communities even. I would very much extend that logic and say that the same goes, and should go, for investing in women entrepreneurs. It’s a myth that women do not understand finances, a myth that they can’t manage business as effortlessly as home or kids. It’s also a myth that there is not a robust enough demand-side pipeline of women-owned businesses qualifying for financing or investments. In fact, I would argue that the challenge is on the supply side of financing. The players are few, the financing instruments too traditional and too rigid, the mindset needed amongst the powers-that-be approving credit is often found wanting or not sensitized enough and there is almost complete lack of committing to women entrepreneurs as a priority segment (which it needs to be categorized as). Some of this can be easily rectified through not-too-drastic policy tweaks, others by simply being more cognizant of the fact that women enterprises can perform at par, if not better than men-owned ones; just give them a level playing field.

Finally, the quote from Desmond Tutu, I think sums it up really well and should be the adage to abide by, "If we are going to see real development in the world then our best investment is women."

Join conversations about inclusive opportunities at the Global Sankalp Summit from Apr 9-10 in New Delhi, India.