Women's empowerment in India is increasingly supported by the banking sector's revolutionary efforts, particularly in the areas of finance and economic independence. These efforts have helped women achieve socio-economic equity in society. Despite the government and public sector banks' commendable initiatives, there are specific criteria that financial institutions seek before providing loans to women entrepreneurs. This study, from a banker's perspective, identifies 22 critical factors that impact loan approval for women. Key findings highlight the significance of factors such as family background, report feasibility, financial support, loan repayment capacity, and willingness to take risks. These insights can inform policy development in India and other developing nations, fostering women's entrepreneurship, economic progress, and empowerment.
TopIntroduction
Entrepreneurship is related to innovative, systematizing, manufacturing activities, carrying concerned risk and managing economic insecurities (Khan et al, 2022; Khan, Sharma and Thoudam, 2019; Khatri et al., 2022). All over the world, it has been identified as an indispensable part of economic growth. Women entrepreneurs impart economic growth through their participation in entrepreneurship (Gangwar & Khan, 2022; Magd et al., 2022). They contribute to the economy and promote entrepreneurship among women. Women entrepreneurship is achieving significance with a rise in speedy entrepreneurial growth in budding nations like India (Gangwar & Khan, 2022). With the assistance of the nation’s government policies and friendly environment together with institutional reinforcement, vocational guidance, edification, etc. has strengthened women and successively changed the existence of women as women entrepreneurs generating employment and heightening the economy (Magd & Khan, 2022). Despite all the policies, support and the buzz women entrepreneurship in India are yet to take off. (Wesemann & Wincent, 2021) Stereotypes about female entrepreneurs make it challenging for them to get investment. (Vong et al., 2014) Every aspect of the socio-economic development of a country depends on the financial inclusion of women microentrepreneurs.
As a vital component of community development, women entrepreneurs often support social activities and local economies. Their companies have the capacity to develop into community centres that assist local development efforts, generate employment opportunities, and cultivate a sense of social responsibility. Women's entrepreneurship is crucial for economies and societies as a whole, as well as for the personal and professional development of women. A route to greater economic prosperity, equality, and sustainable development is to assist and encourage women in their entrepreneurial endeavours. Half of the population's potential is unlocked, creating a more diverse and dynamic corporate environment.
(Wu et al., 2019) The results show that low levels of female entrepreneurship are caused by women's entrepreneurial hurdles, which include primarily poor female entrepreneurial cognitions and a high initial finance demand. (Yingjun et al., 2021) Academics have been paying more attention to female entrepreneurs, who make up the fastest-growing category of entrepreneurs worldwide, especially in recent years. (Younas & Rafay, 2021) Results indicate that women entrepreneurs are not well-versed in financial jargon, financial access mechanisms, or government programmes for women businesses. (Zapalska et al., 2016) Due to significant obstacles to acquiring funding, women's entrepreneurship has not yet reached its full potential. The majority of Islamic female entrepreneurs' initial financing comes from friends, family, and personal savings.
The Indian Government has structured a range of strategies for women entrepreneurs to cope with the basic requirements for the settlement of business to marketing and trade activities. Most women have taken advantage of these policies. Financial assistance and schemes offered by public sector banks/institutions to promote entrepreneurship among women are as follows-
- I.
Direct and indirect financial support by national banks, SFCs that offer credit, grants and subsidies to control capital setbacks.
- II.
DIC promotes MSME’s and provides them with registration and financial facilities through industrial cooperative banks. To promote SME’s it helps in the identification of suitable schemes, preparation of feasibility reports, arrangement of credit facilities, machinery and equipment and raw materials. Industrial clusters are also developed with the help of the government to provide space for industrial development.
- III.
The Industrial Development Bank of India (IDBI) offers instant monetary assistance to women entrepreneurs under the ‘Mahila Ayog Nidhi Scheme’. In addition, direct monetary assistance is offered to women entrepreneurs from different institutions such as SDBI, NSIC, IFCI, and NABARD.