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Women Entrepreneur in SMEs: A Guidebook For Planning, Financing and Achieving their Business Goals $300 billion annual credit deficit to formal women-owned SMEs, but here's the way out

By Akash Shukla

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Entrepreneurship is becoming a new trend in the business industry. Women are not only standing shoulder to shoulder with men but have also started to carve out a niche for themselves in this scenario. With proper planning and execution of their innovative ideas, they are slowly becoming the leaders in their respective fields.

Be it a large firm or a small firm, women have started to compete with men in all domains of the business world. However, as entrepreneurs, they seem to be restricted by conditions and lack of opportunities or information rather than their capability. More than 97per cent of micro businesses are owned by women in India. Their ownership of medium businesses is negligible at 0.1per cent. They do not own large businesses yet. It is the small business of women that create 70per cent of financial demand from formal sources.

Women who would wish to become a future entrepreneur need to tackle the following problems:


First and the most important step for becoming an entrepreneur is planning. It is started by demarcating short and long term goals. Short term goals are the goals which you want to achieve in a period of one to two years, whereas long term goals are the goals which you tend to achieve in three to five years. Almost anything you plan depends upon the goals that you have set for yourself to achieve. With proper planning, execution becomes smoother, and this means that you would never lose sight of your goals and make steady progress. Goals should be listed and further broken down into smaller tasks. It helps in better organization of work. Beginning by achieving helps to keep you motivated. It also allows you to chart and track your progress.

It becomes very difficult and close to impossible to sustain a business without seed fund. Research says that only 30per cent of women-owned SMEs are sustaining rest while 70per cent of the SMEs owned by women in developing countries are either shut down owing to lack of resources and a strong support system by the financial institutions. As a result, $300 billion annual credit deficit to formal women-owned SMEs.


The second major hurdle that one faces is proper planning of finance. There are two aspects of finance that need to be looked at, the sources of finance and the usage of finance. A source can be either personal savings or professional help i.e. banks or any financial institutions available in the country. Nowadays the government too has started supporting entrepreneurship and has developed various plans and schemes for the benefit of women entrepreneurs. The Government believes in making the women independent by providing them with numerous opportunities. The banks are at 30-50per cent lesser risk in loans given to women entrepreneurs. They are also favoured as loans given to them prove to be 100per cent more profitable for banks, as compared to those given to men. Yet, formal financial sources account for only 3.1per cent of all cases.

Next thing is the usage of finance which is a tricky problem and can only be solved with proper guidance and help from experts and also gained through personal experience. Various experts provide assistance in financial matters by charging a nominal fee. Even senior members of the family can guide us in these matters. In fact, the informal financial sources account for about 75per cent of all financial needs of women entrepreneurs. People are also coming up with television shows, in which guidance is provided. Women can also use online platforms and forums to solve their problems and seek help in crucial matters. Proper usage of finance cannot be done merely by seeking help from experts but through proper research on one's own. Ultimately, it is your plan and money that is at stake and none else can feel, think and decide about it as you can. Finance management should be smart, careful and tuned to the overall needs and goals of the business.

Achieving the Goals

The next foremost barriers are execution and achieving business goals. Business goals are achievable if one is determined and focused. One needs to plan properly but also keep a track of the dynamics of the business industry and market. It is best to predict the future beforehand to have an upper hand. Only persistent hard-work can lead to a successful business. Women need to have innovative and unique ideas to put into practice to make a place for themselves amidst the crowd. They need to build their individual identity to make their business a prodigious success.

As per World Bank, research says Women-led enterprises tend to be concentrated in retail and service sectors where profits and growth opportunities are lower, and rarely in more financially profitable industrial sectors such as construction, electronics or software.

Apparently, women need to develop and possess the entrepreneurial qualities to carve a space for them and become leaders of the business industry. Urge for self- dependence and confidence towards their work would be crucial for them to reach on top. No matter how colossal the challenges are, they need to think hard, analyze, break down the obstacles and solve them systematically with a rational approach. Having a practical approach towards things and an open mind would help them to grow for future endeavours.

Akash Shukla

Founder, Uprise India Initiative Foundation

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