Women-led businesses are thriving like never before. The ambition is there. The drive is undeniable. But here’s the hard truth—women entrepreneurs still struggle to secure the funding they need to bring their visions to life.

In India, only 20% of Micro, Small, and Medium Enterprises (MSMEs) are women-owned. This underrepresentation highlights systemic barriers in access to capital. Women face higher rejection rates than their male counterparts, smaller loan amounts when approved, less favourable interest rates, more demanding collateral requirements, etc.

A combination of factors fuels these:

• Unconscious bias : Many financial evaluation models are built around traditional, male-dominated business structures.
• Limited credit history : Systemic financial inequalities mean many women have less-established credit histories.
• Industry perceptions : Many women-led businesses operate in sectors like retail, education, and personal services, industries often deemed ‘higher risk’ by traditional lenders.

Why Expanding Access to Business Loans for Women is an Economic Necessity

Research from Boston Consulting Group suggests that if women entrepreneurs had equal access to funding, global GDP could rise by up to $5 trillion annually. Women-led enterprises have been shown to drive higher employee retention, ensuring businesses maintain a stable and committed workforce. They also contribute to greater community investment, as women entrepreneurs are more likely to reinvest their earnings into education, healthcare, and local development.

Additionally, these businesses lead to more hiring of women, creating opportunities for economic independence and career growth. Furthermore, women entrepreneurs play a crucial role in driving innovation in underserved markets, addressing gaps that traditional businesses may overlook.

NBFCs play a pivotal role in bridging this funding gap by offering tailored financial solutions to women entrepreneurs. Unlike traditional lenders, NBFCs understand the unique cash flow cycles of small businesses and can structure loans that align with business revenue rather than rigid credit score requirements.

Financing Options for Women Entrepreneurs

More financial institutions and government initiatives are recognizing these barriers and working to close the gap. Many banks now offer specialized small business loans for women. However, they typically require strong credit scores (680+) and an established business history. There are also specialized lenders focused on underserved communities, offering capital to women entrepreneurs in rural and low-income areas.

NBFCs have emerged as a crucial funding source for women entrepreneurs, offering faster loan approvals, minimal paperwork, and unsecured loans that do not rely on traditional collateral. Many NBFCs focus on cash-flow-based lending, making credit more accessible to women-led businesses in sectors often overlooked by banks.

Moreover, there are various government initiatives like Pradhan Mantri Mudra Yojana (PMMY), Stand-Up India, Trade Related Entrepreneurship Assistance and Development (TREAD), Mahila E-Haat, Women Entrepreneurship Platform (WEP), and many more. There are also numerous private sector initiatives including SIDBI-backed Funds, Mann Deshi Foundation, Mahila Arthik Vikas Mahamandal (MAVIM), and many CSR initiatives of companies.

For women entrepreneurs seeking financing, a proactive approach can make all the difference.

1. Choose the Right Loan Scheme – Explore government-backed schemes which offer tailored financial assistance for women entrepreneurs in MSMEs.
2. Build a Strong Business Plan – Prepare a well-structured plan outlining business objective, revenue model, market potential, loan utilization, projected financials, and repayment capacity to increase lender confidence.
3. Maintain a Healthy Credit Score – Ensure a CIBIL score above 650, clear outstanding debts, maintain financial discipline, and establish a strong credit history to improve loan eligibility and interest rates.
4. Register Your Business – Obtain Udyam Registration (MSME certificate), GST registration, business licenses, and other necessary approvals to enhance credibility and access government benefits and subsidies.
5. Leverage Digital Lending Platforms – Many NBFCs and fintech lenders now offer digital loan application processes that reduce approval times from weeks to days. Exploring these platforms can be a game-changer for women entrepreneurs.
6. Organize Financial Records – Maintain proper income statements, balance sheets, tax filings, and cash flow statements, ensuring transparency and proof of stable revenue streams for loan approval.
7. Collateral & Guarantee Options – Assess if you can offer property, fixed deposits, or gold as collateral, or opt for collateral-free loans by ensuring a strong business cash flow and repayment capability.
8. Explore NBFC Financing Options – Consider NBFCs for quicker approvals, lower documentation requirements, and cash-flow-based lending that does not demand traditional collateral.

Moving Forward Together

India’s MSME sector, the backbone of the economy, holds the power to transform lives and communities. Yet, countless women with dreams, ideas, and the drive to succeed still struggle to access the capital they need to build and grow their businesses. This holds back potential that could fuel innovation, create jobs, and uplift entire families.

NBFCs are changing this landscape by democratizing access to credit, introducing innovative lending models, and supporting women-led MSMEs with flexible financing. When we open doors to funding, we’re not just supporting women entrepreneurs; we’re investing in a future filled with possibilities, progress, and shared prosperity.