Introduction: The Role of Women-Led MSMEs in Economic Growth

Women-led micro, small, and medium enterprises (MSMEs) are pivotal to India’s economic landscape, contributing to job creation and community empowerment. Despite their significant potential—evidenced by 63% of new jobs in manufacturing as of 2024—these enterprises face numerous systemic barriers that hinder their growth. To effectively address these challenges, an ecosystem-based approach involving various stakeholders is essential.

Current Landscape of Women-Led MSMEs in India

Recent advancements, including targeted policy interventions like the Udhayam Shakti Portal and technological innovations such as UPI, have positively impacted women-led MSMEs. Increased access to finance and digital platforms has catalyzed change, allowing these enterprises to navigate traditional barriers and contribute more robustly to the economy. However, persistent issues continue to impede their progress toward full economic empowerment.

Challenges Faced by Women-Led MSMEs

• Access to Finance and Markets: Women-led MSMEs encounter a significant credit gap, with an estimated USD 158 billion deficit in funding opportunities. Despite government schemes like MUDRA, issues such as collateral requirements and high-interest rates remain major obstacles to securing loans.

• Digital Divide: The adoption of digital tools is alarmingly low among women entrepreneurs, with only 17.6% utilizing digital methods for customer management. This lag in digital integration can severely limit their market reach and operational efficiency.

• Business Development Services: A lack of access to formal training and mentorship constraints 86% of women entrepreneurs, preventing them from acquiring the necessary skills to scale their businesses.

• Socio-Cultural Barriers: Traditional gender roles restrict the growth of women-led MSMEs, which constitute less than 20% of total MSMEs in India. Many women remain confined to informal or home-based enterprises due to social norms and mobility constraints.

• Climate Risks: Operating in climate-vulnerable sectors, such as agriculture and textiles, women-led MSMEs face unique challenges related to climate change. Access to climate adaptation financing is critical yet severely limited.

Sociological Perspectives on Women-Led MSMEs

• Functionalists: Functionalists might argue that empowering women-led MSMEs contributes to greater social integration and stability. By incorporating a larger segment of the population into the formal economy, it reduces social exclusion and potential for social unrest.

• Marxists: Marxists might view the focus on women-led MSMEs within the broader context of capitalist accumulation. While seemingly empowering, it could be argued that this initiative primarily serves to expand the capitalist base and create new avenues for profit generation, potentially even leading to the exploitation of women’s labor within these enterprises.

• Symbolic Interactionism: This perspective would focus on how societal norms and stereotypes about gender influence interactions and opportunities for women entrepreneurs. The “socio-cultural barriers” mentioned in the text are a key area of focus for symbolic interactionists, who would examine how these norms are created, maintained, and potentially challenged through social interaction.

• Post-Structuralism/Post-Modernism: These perspectives might critique the very notion of a universal “empowerment” narrative. They would emphasize the diverse experiences of women entrepreneurs and how power operates in complex and localized ways. The focus would be on deconstructing dominant discourses surrounding entrepreneurship and highlighting alternative forms of economic participation.

• Weberian Perspective: Weber might analyze the role of bureaucracy and state policies in shaping the opportunities available to women-led MSMEs. They would examine how bureaucratic structures can create both opportunities and obstacles, and how women entrepreneurs navigate these systems. The concept of “social closure” could be relevant, where dominant groups (often men) exclude women from access to resources and networks.

Transformative Strategies for Empowerment

To empower women-led MSMEs, a collaborative, ecosystem-based approach is necessary. Stakeholders must work together to create an enabling environment that addresses systemic inequities and fosters sustainable growth.

• Recognising the Need for Systemic Change: It is imperative to reform financial systems to ensure they are inclusive and equitable. This involves reassessing collateral requirements and designing financial products that cater specifically to the needs of women entrepreneurs.

• Bold and Intentional Investments: Innovative financing mechanisms such as blended finance can attract diverse funding sources and mitigate risks. Public-private partnerships can play a crucial role in creating a supportive regulatory environment that encourages investment in women-led enterprises.

• Building Resilient Institutions: Investment in support systems—such as mentorship programs, capacity-building organizations, and advocacy platforms—can strengthen women-led MSMEs. Collaborations among different sectors can help institutionalise women’s empowerment efforts and ensure their sustainability.

The Role of Ecosystem Builders

Ecosystem builders, including nonprofits and financial institutions, have a critical role in providing technical assistance and market linkages to women-led MSMEs. Successful models, such as the Mann Deshi Foundation, showcase how integrated support systems can foster greater visibility and financial independence for women entrepreneurs.

Conclusion: Pathways to Inclusive Economic Growth

Addressing the challenges faced by women-led MSMEs is crucial for fostering inclusive and sustainable economic growth in India. By promoting collaboration among stakeholders and implementing targeted strategies, we can unlock the potential of women entrepreneurs and catalyse transformative change within communities. The future of India’s entrepreneurial landscape will depend on our collective efforts to empower women-led enterprises and reshape the economic narrative for generations to come.