85% Of Women Entrepreneurs In India Have Struggled To Secure Loans From 2019 To 2022

A study conducted by Bharatiya Yuva Shakti (BYST) states that at least 85% of women entrepreneurs faced challenges while seeking a loan from nationalised banks. It further added that at least 60% of those struggle to access critical financial services.

The survey took three years between February 2019 and August 2022. During this period, BYST Women Entrepreneurship Development Programme tried setting up profitable businesses in metropolitan cities like Delhi-NCR, Pune, and Chennai. It aimed at increasing entrepreneurship.

Improvement In Understanding Of Banking System & Business Model

With the programme, BYST noted that its programme helped women understand banking and entrepreneurship better. Their skill set significantly improved by the end of August 2022. It was better for at least 93% of businesswomen.

Speaking to the Mint, Lakshmi Venkataraman Venkatesan, Founding and Managing Trustee of BYST, said that public sector banks like State Bank of India and Union Bank of India have assisted women entrepreneurs seeking loans under the guidance of BYST.

The organisation has helped several underprivileged entrepreneurs to develop their skills and get professional training in their preferred domains. Their officers scrutinise every KYC complaint before the panel submits applications to banks.

BYST assures bank managers about the background of applicants and only submits proposals with a sustainable business model.

“These entrepreneurs after attending months of training programmes are well mentored and are therefore safe for banks to give loans,” she added.

Programme Has Groomed 450 Women Entrepreneurs

BYST programme aimed to help women earning below ₹2 lakh annually to set up businesses in tier I cities. It improved the skill sets of 450 women entrepreneurs with an average of 34. The programme has been able to generate direct and indirect employment for about 10,000 workers.

BYST also helps women gain capital under MUDRA (Micro Units Development & Refinance Agency Ltd.) and CGTMSE (Credit Guarantee Fund Trust For Micro and Small Enterprises).

The workers of the trust helped women develop business models and proposals that could make it easier for them to get their loan amounts approved.

Of all the businesswomen they have helped, 94% of the beneficiaries reported finding the process of loan approval smooth because workers of BYST had already explained to them the entire process.

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Unseen Bias Faced By Women

In July, Financial Express reported that women entrepreneurs often fall prey to unseen bias. We live in a patriarchal society where the collateral-acceptable assets are often under the names of male members of the family, making it difficult for women to get loans.

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This has also created a mindset that women perform better in the construction of the household and would fail to run a business. The article also reported that the unseen bias often results in the rejection of loan applications or delayed approval when the seeker is a woman.

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