Women entrepreneurs desire mentorship, 65% have not taken a business loan: Report – Banking & Finance News

Is availability of funds and lack of awareness a matter of concern for women keen in taking the entrepreneurship route?According to a report by DBS Bank and CRISIL, 65 per cent of self-employed women in Indian metros have not taken a business loan and 30 per cent of self-employed women rely on personal loans to fund their businesses. Lack of awareness about Govt schemes is also a major highlight of the report.

The report is the third in its ‘Women and Finance’ series that surveys 400 self-employed women in 10 Indian cities and reveals that  those who have opted for loans, bank loans are a priority among 21 per cent of self-employed women. They often use personal assets for collateral in lieu of loans such as personal property 28 per cent and gold 25 per cent; it shows their preference to avoid risks. 64 per cent use gold as collateral, majorly to invest in savings accounts and gold as they are more safe investments.

The survey highlights the unawareness among self-employed women about the various government schemes that can provide financial assistance to their business. Around 24 per cent of respondents tell about their unawareness about the available schemes. Simultaneously 34 per cent had not used any government schemes.

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Banking products and support beyond financial assistance

The Banking facilities used by women entrepreneurs include cash credit, overdraft facilities, corporate credit cards, and property-backed term loans. The 39 per cent prefer cash credit and overdraft facilities, 25 per cent prefer corporate credit cards and 11 per cent prefer property-backed term loans. 39 per cent of responders believe that the major factors to influence the choice of bank loans are competitive interest rate and flexible repayment.

The report mentions the need for support beyond money expressed by women entrepreneurs. Around 26 per cent expect mentorship, 18 per cent want help with government schemes, and 15 per cent require digital assistance in financial processes. To make their business function more efficiently 18 per cent of women showed interest in women-based communities and 13 per cent want access to industry-specific financial data and benchmarks.

Divyesh Dalal, Managing Director & Head of global Transaction Services, SME and Institutional Liabilities, DBS Bank India, said, “The insights from our latest ‘Women and Finance’ report highlight key areas where we can make an impact. We see opportunities to boost awareness and adoption of government entitlements through education and training.”

He also pushed the idea of establishing networking platforms, communities, and entrepreneurial ecosystems. These will help the women entrepreneurs with collaboration, mentorship, skill-building, and knowledge exchange to accelerate their business growth.

Growth in digital payments

In the journey of digitizing India’s financial transactions, UPI is the most important player followed by Mobile Banking. As per the Reserve Bank of India (RBI),  UPI had 80 per cent share in digital payments in the fiscal year 2024. 

Pushan Sharma, Director-Research, CRISIL Market Intelligence & Analytics, said, “73% of self-employed women surveyed preferred receiving payments from customers digitally, and 87% used digital methods to pay their business expenses. UPI is the most-used mode for both receiving (35%) and paying (26%) business expenses. However, cash remains indispensable for payroll and operational expenses, used by 36% of respondents.”

Adopting sustainable business practices

The report highlights that 52 per cent of self-employed women living in Indian metro cities have implemented sustainability policies in their businesses showing acceptance towards sustainability. However, 14 per cent of the self-employed women have approached a bank for sustainability-linked finance. 

It is quite encouraging that 76 per cent have implemented sustainable business practices such as 26 per cent prefer energy conservation, 26 per cent prefer onboarding female representatives, 24 per cent prefer waste reduction and recycling measures. 13% have adopted practices related to water conservation and rainwater harvesting.