Women entrepreneurs in MSMEs: Rising numbers, unequal access

India’s women-led MSMEs are growing in number and ambition—but they still face deep financial, social, and structural hurdles. Bridging this gender gap is key to inclusive economic growth.

A growing force in entrepreneurship

Women are increasingly driving India’s MSME ecosystem. According to the Annual Survey of Unincorporated Sector Enterprises (2023-24), 26.2% of proprietary MSMEs are now women-owned, signaling shifting social norms, rising awareness, and expanding government support.

From textile hubs and food processing units to IT services and artisan clusters, women entrepreneurs are entering diverse sectors and bringing innovation to the grassroots. This is not just about representation—it’s about economic potential. Studies show that narrowing the gender gap in entrepreneurship could boost India’s GDP by trillions.

Credit is the biggest hurdle

While the number of women-led MSMEs has risen, access to credit remains the top barrier. As per the SIDBI-Crisil 2025 report, only 76% of women-led enterprises have accessed formal credit, compared to 84% for male-owned ones. The credit gap for women entrepreneurs is a staggering 35%, the highest across all demographics.

Reasons for this gap include:

• Lack of collateral: Many women lack property or high-value assets in their name.
• Thin credit files: First-time entrepreneurs have little to no financial history.
• Perceived risk: Some lenders continue to view women-led businesses as higher risk, especially in male-dominated sectors.

Worryingly, women are more likely to rely on informal credit, often at higher interest rates and without legal protections.

Beyond finance: Structural and social barriers

Access to funding is just one layer of the challenge. Many women entrepreneurs face:

• Limited networks and mentorship opportunities
• Lower digital literacy, especially in rural areas
• Time poverty, as they juggle unpaid care responsibilities
• Social biases that discourage risk-taking or expansion

As a result, while more women are entering business, few are scaling significantly. Most women-led MSMEs remain micro in size, and their participation in export-oriented or high-tech sectors is minimal.

Government support exists—but reach is limited

Schemes like Stand Up India, PMEGP, and MSE-CDP include targeted support for women entrepreneurs, offering subsidised loans, skill development, and cluster-level infrastructure. However, uptake is still limited due to lack of awareness, paperwork burdens, and eligibility criteria that exclude informal or home-based businesses.

The Udyam Assist Platform has helped bring more women-led micro enterprises into the formal net, but challenges remain in converting registration into tangible benefits.

What women entrepreneurs want?

From the SIDBI primary survey, women-led MSMEs voiced a clear set of priorities:

• Simpler loan processes and reduced collateral requirements
• Mentorship networks tailored for women
• Marketing and e-commerce support to expand reach
• Better access to government procurement via platforms like GeM and ONDC

Digital lending, if done inclusively, offers promise—but must be accompanied by handholding, financial literacy, and trust-building.

The road to equality is the road to growth

Women-led MSMEs are not just a social imperative—they’re a growth engine. With focused interventions, India can unlock millions of untapped entrepreneurs, generate jobs, and foster resilient local economies.

But to do that, it must move from token inclusion to true equity—where women not only start businesses, but scale them, sustain them, and lead across sectors.