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Ease of doing business for MSMEs: A survey of 308 women in the MSME sector by the economic policy think tank ICRIER and development bank NABARD has said that 88.4 per cent of MSME owners reported adverse effects of the pandemic on their business while only 5.8 per cent of them received help from the government during the pandemic. The survey report Digital Financial Inclusion of Women in MSMEs: G20 and India launched on Friday studied the achievements and gaps in digital financial inclusion of women and MSMEs in India.
“The MSME owners want government support in terms of simplified procedures for women entrepreneurs to obtain loans, reduced paperwork, faster approvals, more time for repayment and infrastructure upgradation programmes. Despite the government introducing several schemes to promote access to finance for women entrepreneurs, there is a lack of awareness among women in the MSME sector,” the report said.
Moreover, further information on the schemes was not available online resulting in a lower number of women benefitting from the programmes while lack of use of digital tools and digital financial literacy was also leading to information asymmetry, it noted. The most common issue faced by the surveyed MSME owners, according to the report, was access to finance, with 60.5 per cent of MSME owners finding credit access difficult. Around 47.7 per cent of owners thought it was even more difficult to obtain a loan if the owner was a woman, showing a hidden perception of gender bias.
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“While India has done incredibly well compared to its past performance, it has a long way to travel to create an all-inclusive digital financial system. Increased access to and usage of digital financial services by women will not only enable affordable transfers but also increase women’s bargaining power in case of social security transfers, strengthen women’s resilience to financial, economic and health shocks and reduce discrimination/cultural bias against women as potential borrowers,” said Deepak, Mishra, Director and CE, ICRIER.
However, according to government data, the number of women beneficiaries across major government schemes had jumped significantly from the pre-Covid period. As per the data shared by Minister of State for MSMEs Bhanu Pratap Singh Verma in Lok Sabha in July this year, the total women beneficiary count under the employment generation scheme Prime Minister’s Employment Generation Programme (PMEGP) stood at 39,154 in FY22, up 43 per cent from 27,285 in FY21 and 58 per cent from 24,720 in FY20.
Also, under the Public Procurement Policy, which mandates a minimum 3 per cent annual procurement by government departments and public enterprises from women-led units, the women beneficiary count jumped 180 per cent from 3,666 in FY20 to 10,287 in FY22 and 105 per cent from 5,013 beneficiaries in FY21. Moreover, the Entrepreneurship Skill Development Programme (ESDP) also recorded an increase in women entrepreneurs supported to 24,734 in FY22 from 13,640 in FY21, as per the data.
The 308 respondents in the survey included 86 MSME owners and 222 employees across eight sectors viz., food processing, garments and textiles, handicrafts, electronics and engineering, leather, retail, IT/ITeS, and tourism & hospitality.
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