CATALYSTS FOR CHANGE: WOMEN-LED MSMES AND THEIR IMPACT ON LOCAL COMMUNITIES
Gender equality is a cornerstone of poverty reduction and sustainable development. Empowering women is not only a moral imperative but also a key driver of positive social and economic outcomes. In India, where labour is abundant and capital is scarce, Micro, Small, and Medium Enterprises (MSMEs) have emerged as a crucial mode of earning for millions, particularly for women in non-urban areas. These enterprises are not only helping to bridge the gender gap but also playing a significant role in the overall development of the nation.
MSMEs contribute approximately 45% of India's industrial output and generate employment for about 60 million people, creating 1.3 million jobs annually. Across all business sizes, women held the largest proportion of micro-companies. Although, this number still does not exceed 20% of all micro, small and medium companies in India, compared to over 80% for males. (Statista, 2021). This disparity underscores the challenges women face in accessing resources, markets, and networks, which are essential for business growth.
Micro-entrepreneurship has aided women's empowerment in a variety of areas, including socioeconomic opportunity, property rights, political representation, social equality, family and community development.
These women-led enterprises are essential for several reasons:
Economic Independence:
One of the most profound impacts of women’s participation in the MSME sector is economic independence. By running their own businesses, women can contribute to household income, make informed decisions, and improve their overall quality of life. Financial independence not only empowers women on an individual level but also enhances their status within their families and communities.
MSMEs provide an ideal platform for women to achieve this independence. The flexibility offered by many MSMEs allows women to balance their professional and domestic responsibilities, making entrepreneurship a viable option even for those with significant household duties. This flexibility is crucial in a society where women are often expected to manage both work and home.
Job Creation and Inclusive Growth:
Women-led MSMEs are not just about individual empowerment; they also play a crucial role in job creation. These enterprises often employ other women, creating a ripple effect that empowers more women and contributes to the overall employment scenario in local communities.
Women-led enterprises foster an environment of inclusive growth. Women entrepreneurs tend to be more attuned to the needs of other women, creating workplaces that are supportive and inclusive. Women in leadership roles, often use their influence to open doors for other women, promoting equality and diversity in the workplace. (Gonzalez, 2021)
Community Development:
The impact of women entrepreneurs extends beyond their businesses. Women who achieve economic independence often reinvest their earnings into their communities, supporting education, healthcare, and local infrastructure. This grassroots-level investment drives community development and has a lasting impact on future generations.
The International Monetary Fund (IMF) has established that enabling women’s entrepreneurship has a multiplier effect. Women who are economically empowered tend to make better decisions regarding their children’s health and education, leading to improved outcomes for the next generation (Bain & Company, 2020). The transformative power of women’s economic participation will lead to a shift from high fertility, poor education, and ill health to more conscious family planning and better health choices.
GOVERNMENT SCHEMES
These government initiatives play a crucial role in creating a supportive ecosystem for women entrepreneurs in India’s MSME sector. By addressing key challenges such as access to finance, skill development, and market exposure, these schemes help women overcome barriers and unlock their entrepreneurial potential
- Pradhan Mantri Mudra Yojana (PMMY)
The PMMY scheme offers women entrepreneurs the opportunity to secure credit without the need for collateral, making it easier for them to start or expand their businesses. The scheme is particularly beneficial for those operating in the informal sector, offering loans that cater to different stages of business growth.
- Mahila Udyam Nidhi Scheme
Managed by the Small Industries Development Bank of India (SIDBI), this scheme provides soft loans to women entrepreneurs for setting up new projects in small-scale sectors or for upgrading existing units. The favourable loan terms help women entrepreneurs overcome financial barriers and focus on business growth.
- Udyogini Scheme
Managed by the Women Development Corporation, the Udyogini Scheme offers loans at subsidized interest rates to help women from marginalized communities, establish micro-enterprises. The scheme also includes skill development training to enhance the business acumen of these entrepreneurs, ensuring they are well-equipped to manage their enterprises effectively.
- Trade-Related Entrepreneurship Assistance and Development (TREAD) Scheme
The TREAD Scheme addresses the difficulties women encounter in accessing credit by facilitating loans through responsible NGOs. These NGOs play a vital role in managing funds and providing training and counselling, ensuring that women not only receive financial support but also develop the skills needed for successful entrepreneurship.
