Women entrepreneurs in India face a lot of challenges while starting and running their own business. As time goes, the biggest challenge they face is funding. There is a lot of competition in the market and of course, the funds are limited. There is also a conservative attitude towards women entrepreneurship in the country which makes it tricky for women entrepreneurs to secure funding for their business.
In all, it does not come as a surprise that the Indian women entrepreneurs face more difficulties to get funds as compared to male counterparts. As per the reports, 92% of the total women entrepreneurs in India finance their business through their own source of money – savings, loans from the informal sector, and quasi-capital.
The reports clearly depict the contrast to the performances of the two units. However, as business trends, the business owned by women in India perform better. They have a diversified product range and their NPAs are also lower than male counterparts. The financial crisis for them is yet inevitable, majorly because of social stereotypes, perceptions, and accessibility.
Having said that, the financial and lending scenario in India has undergone a change. With the presence of online lenders and NBFCs in the market, there are many borrowing options available for women business owners in India. The Indian economy is in booming phase and the Indian market is becoming an ideal place for women business owners. Let’s now consider the borrowing options for women entrepreneurs in India.
also read: how to get an instant loan for business?
This is the most common source of funding used by most entrepreneurs. They use their own funds to expand their business. Or they borrow funds from their friends and families. However, these funds are generally not enough to scale-up the business or to expand it to other cities.
Equity funding is a way of raising funds for business. In equity funding, the business owner is selling a part of equity- business to the equity funder. Here, the business owner is not required to pay back the availed loan or funds since he sells a part of the business. As a result, the Indian entrepreneur will also lose the sole power of making decisions regarding business. The equity funder will also participate in the decision making.
Non-Banking Financial Company is an excellent option for women-owned business loan these days. Their eligibility criteria are not that rigid as compared to another traditional lender. NBFCs also require a minimal list of documents for the loan. The other biggest advantage of availing an NBFC business loan is that they offer business loans without security. The NBFC business loans are offered at customer-friendly terms and conditions and at flexible repayment tenure. This option lately is becoming the best and ideal option for women entrepreneurs.
Securing additional funds for business is certainly very challenging for women entrepreneurs in India. However, new generation lenders are helping to overcome this barrier and are always available for MSME loans. They offer collateral-free business loans at easy to meet terms and conditions.