Women-owned MSMEs in India: Micro, Small, and Medium Enterprises (MSMEs) are not just growth engines; they are instruments of economic decentralisation, reducing regional disparities and spreading opportunity more equitably. Contributing nearly 30% of GDP and employing over 110 million people, they remain central to India’s industrial and employment base.
The 11th anniversary of the Pradhan Mantri Jan Dhan Yojana (PMJDY) is a reminder of how access can change lives. By giving more than 51 crore people a bank account—56% of them women—the scheme created something that had long been denied: a financial identity. But a bank account is only the first step. The harder question is why so few women have been able to travel from Jan Dhan to entrepreneurship. With only 20% of MSMEs owned by women—a figure stagnant for five years—the promise of full economic inclusion has not materialised. This disconnect between access and agency lies at the heart of India’s gender gap in entrepreneurship.
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Ownership patterns: The scaling paradox
Table 1: Percentage Distribution of Enterprises in Rural and Urban Areas (Male/Female Ownership)
| Area | Male-Owned | Female-Owned |
| Rural | 78% | 22% |
| Urban | 80% | 20% |
The more alarming trend emerges when we examine how ownership patterns change as enterprises scale:
Table 2: Percentage Distribution of Enterprises by Category (Male/Female Ownership)
| Enterprise Type | Male-Owned | Female-Owned |
| Micro | 79% | 21% |
| Small | 83% | 17% |
| Medium | 87% | 13% |
As firms grow in size, women’s share falls sharply—from one in five micro units to barely one in eight medium enterprises. This “scaling paradox” is not just about participation; it signals systemic failure in supporting women-led businesses through growth phases.
Structural barriers to women-owned MSMEs
Financial exclusion: Subsidies under schemes like the Prime Minister’s Employment Generation Programme promise women higher support (25% in urban, 35% in rural areas). But poor enforcement, collateral requirements, and complex processes keep most women out. Limited ownership of property further reduces access to formal credit. Studies show that only 17% of women entrepreneurs are even aware of existing schemes.
Gendered ecosystems and market exclusion: Training programmes often push women into low-growth sectors such as handicrafts or beauty services, while men dominate technical fields. Exclusion from business networks and male-dominated procurement chains limits market access. Worse, some firms misuse women-specific schemes by registering under female family members’ names to claim benefits, diverting resources from genuine entrepreneurs.
The burden of invisible labour: Indian women spend nearly five hours daily on unpaid domestic work—ten times more than men. This “time tax” constrains their ability to scale businesses, attend training, or build networks. Without childcare or flexible support, policy interventions risk failure at the start.
Towards a support ecosystem
Financial architecture overhaul:
- Create a dedicated women’s MSME fund with collateral-free loans.
- Develop gender-sensitive credit scoring that values alternative metrics.
- Mandate gender-disaggregated lending data from banks.
Market access and procurement:
- Introduce supplier diversity rules requiring 5% procurement from women-led MSMEs in government and large corporations.
- Establish industrial clusters tailored for women entrepreneurs.
- Build export-promotion programmes that target women-led firms.
Capacity building in growth sectors:
- Redesign skilling for renewable energy, technology, and manufacturing.
- Partner with academia and industry to promote women in STEM entrepreneurship.
- Expand digital literacy for e-commerce, fintech, and online marketing.
Governance and data transparency:
- Collect and publish gender-disaggregated MSME data regularly.
- Prevent misuse of women’s entrepreneurship benefits.
- Create a national dashboard to track outcomes.
The economic imperative
The underrepresentation of women in MSMEs is not just a gender issue but an economic handicap. Closing the entrepreneurship gap could raise GDP by up to 1.5%. Women-led firms are more likely to hire women, create jobs in underserved areas, and bring innovative products to the market.
India has wasted five years with stagnant women’s participation rates. Anniversaries like PMJDY’s remind us that financial identity was only the first step. Unless policy shifts from piecemeal schemes to structural reforms, India risks missing the demographic dividend. Women’s entrepreneurship must be treated not as token inclusion but as an economic strategy essential for growth.
The time for lip service is over. What is needed now is structural reform backed by urgency—financial, institutional, and social—to unlock the promise of India’s women entrepreneurs.
Lisa Deas is undergraduate student, and Rituparna Kaushiki is an assistant professor of Economics at the FLAME University.