Only 3% of women entrepreneurs in Tier 2 and 3 cities in India have access to external funding like bank loans or equity investments for business initiation or expansion, as per a white paper by the Reserve Bank Innovation Hub (RBIH) in collaboration with SALT-mysaltapp. The paper sheds light on the challenges faced by women entrepreneurs and the absence of a fair competitive environment.
Titled ‘At the Helm: Women Entrepreneurs Transforming Middle India’, the paper aimed to understand the complex socio-economic factors influencing women’s entrepreneurship in Tier 2 and 3 cities. It involved 300 women across 30 cities, focusing on businesses operational for at least three years with over 10 employees. All interviewed women were either founders or held full-time decision-making roles in family businesses.
The study highlighted a significant information gap due to the lack of gender-disaggregated data, crucial for countering stereotypes and driving policy interventions. Despite India’s strides in STEM and postgraduate education for girls, the low participation of women in entrepreneurship remains puzzling. The sample comprised diverse, educated women entrepreneurs, with 14% holding graduate degrees and 55% having pursued higher education. However, the age range of 30 to 60 years among entrepreneurs underscores delayed success for women due to multiple responsibilities.
Cities perceived as safer for women show a higher tendency for entrepreneurial ventures, indicating that enhancing women’s safety can enrich the entrepreneurial ecosystem. There’s an urgent call for gender-responsive policies in Tier 2 and 3 cities encompassing education, capital access, skill development, and community network strengthening to foster an inclusive entrepreneurial landscape.
Promoting female entrepreneurship in Tier 2 cities holds transformative potential, with the existing ecosystem displaying promise. Moreover, the influx of female talent into these cities through marriage-related migration, coupled with increasing higher education among women, presents an opportunity to encourage entrepreneurial careers.
