The figures for India are, of course, more discouraging. According to the National Sample Survey Organisation, only 14 per cent of business establishments in India are being run by women entrepreneurs. While most of these are small-scale, almost 80 per cent are self-financed. In 2015, The Global Entrepreneurship and Development Institute issued a report containing its Female Entrepreneurship Index ranking countries on the conditions present that will fuel high potential female entrepreneurship development. India was near the bottom on that Index, ranking 70th out of 77 countries. In 2017, MasterCard issued its Index of Women Entrepreneurs where India ranked 49th out of 54 countries.
And a McKinsey report found that women generate 37 per cent of global GDP despite accounting for 50 per cent of the global working-age population. But the global average masks large variations among regions. The share of regional GDP output generated by women is only 17 per cent in India.
The reasons for this gender gap are many. Apart from gender bias at work place and a weak infrastructure in capacity building for women to derive necessary skill sets, there is an overall lack of awareness among women themselves of their own potential and opportunities. Social barriers are also intimidating, with many women having to deal with hostility from people closest to them before venturing out to do business on their own. Others say a lot of women entrepreneurs in India do not have an ability to access certain opportunities as they lack certain soft skills — like pitching their ideas to investors. This is understandable as unless they come from a family that has a business or have worked in a business, women entrepreneurs have not seen many role models and have had no coaching on how to start, run and build a business. A mentoring programme can fill that gap.
Besides, numerous studies have found that women in emerging markets have much more difficulty in securing loans than men and have to rely on their own financing. In developing countries, 70 per cent of women-owned small and medium-sized businesses are denied access to capital.
That is why organisations such as the IFC have stepped in. Nearly half of all microfinance loans in India are provided by IFC-backed microfinance institutions, and most of their 40 million borrowers are women. Besides, eight of the small finance banks are IFC’s partners and investees and all of them will focus on women borrowers, just like the microfinance model.
In India, where 400 million people remain cut off from the electricity grid, IFC built a market for off-grid solar products by focusing on women as distributors. It tied up with Frontier Markets, a clean-energy-products company, to develop a network of self-employed women recruited from self-help groups. These women-run alliances provide access to funds and technical assistance to help women in local villages improve their lives and start their own businesses. Between 2016 and 2020, the network is expected to expand to 20,000 women distributors from just 250 in 2016.
India needs more initiatives like this if it has to get out of the trap of women being heavily dependent on low-paying, low-skilled dead-end jobs. India, in fact, sees the highest drop in representation of women from junior to middle-level positions, unlike several other Asian countries where such a drop occurs from middle- to senior-level positions. Data also shows almost one-third of women employees have not resumed work in the absence of a support system at home to take care of the child. And close to 80 per cent of eligible female graduates choose not to participate in the organised workforce or set up their own ventures.