Business facilitation for MSMEs: A survey of 308 women in the MSME sector by economic policy think tank ICRIER and development bank NABARD has revealed that 88.4 percent of MSME owners reported negative impacts of the pandemic on their business, while only 5.8 percent of them requested help from the government received during the pandemic. The survey report, Digital Financial Inclusion of Women in MSMEs: G20 and India, released Friday, examined the achievements and gaps in digital financial inclusion of women and MSMEs in India.
“MSME owners want government support in the form of simplified procedures for women entrepreneurs to obtain loans, less paperwork, faster approvals, more time for repayment and programs to modernize infrastructure. Although the government has introduced several programs to promote women entrepreneurs’ access to finance, there is a lack of awareness among women in the MSME sector,” the report said.
Additionally, more information about the programs was not available online, resulting in fewer women benefiting from the programs, while the lack of use of digital tools and digital financial literacy also led to information asymmetries, she noted. The most common problem faced by MSME owners surveyed, according to the report, was access to finance, with 60.5 percent of MSME owners finding access to credit difficult. Around 47.7 percent of owners felt it was even more difficult to get a loan when the owner was a woman, showing a hidden perception of gender bias.
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“While India has performed incredibly well compared to its past performance, it still has a long way to go to create an all-encompassing digital financial system. Improved access to and use of digital financial services by women will not only enable affordable remittances, but also increase women’s bargaining power in the case of social security transfers, strengthen women’s resilience to financial, economic and health shocks, and eliminate discrimination/cultural prejudice against women as a Borrowers reduce potential,” said Deepak, Mishra, Director and CE, ICRIER.
But the number of women beneficiaries in major government programs had increased significantly since the pre-Covid era, according to government data. According to data shared by Minister of State for MSMEs Bhanu Pratap Singh Verma in Lok Sabha in July this year, the total number of beneficiary women under the Prime Minister’s Job Creation Program (PMEGP) Job Creation Program was in FY22 at 39,154, a 43 percent increase from 27,285 in FY21 and 58 percent from 24,720 in FY20.
Also under the Government Procurement Policy, which requires a minimum of 3 percent annual procurement by government agencies and public companies from women-led entities, the number of beneficiaries increased by 180 percent from 3,666 in FY20 to 10,287 in FY22 and 105 percent from 5,013 beneficiaries in FY21. Additionally, the Entrepreneurship Skill Development Program (ESDP) also saw an increase in supported female entrepreneurs from 13,640 in FY21 to 24,734 in FY22, according to data.
The 308 respondents to the survey included 86 MSME owners and 222 employees across eight sectors, namely food processing, garments and textiles, crafts, electronics and engineering, leather, retail, IT/ITeS, and tourism and hospitality.
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