Women Entrepreneurs and Access to Credit

Why women entrepreneurs face bigger hurdles in getting finance, and how schemes like Mudra, Stand-Up India and digital lending are helping.

Women run a growing number of Indian businesses, but they often struggle to get finance.

The barriers

Lack of collateral: property is often in men’s names.
Smaller, informal businesses without records.
Bias from lenders.
Limited networks and mentors.
Time constraints from caregiving.

Government schemes

Pradhan Mantri Mudra Yojana (2015): collateral-free loans for micro and small businesses. A large majority of Mudra loan accounts have gone to women.
Stand-Up India (2016): bank loans of 10 lakh to 1 crore rupees for women and SC/ST entrepreneurs.
Credit guarantees that reduce lenders’ risk.
SHG and NRLM support.
Women entrepreneurship platforms and incubators.

Digital lending and data

Digital payments create records that help lenders assess women-run businesses without traditional collateral.

Beyond credit

Women entrepreneurs also need:

Market access, including e-commerce and GeM.
Skills and mentoring.
Childcare support.

Research

Studies suggest that capital alone doesn’t always help women’s businesses grow, especially if household members divert funds. Combining finance with training and control over funds, such as in accounts in women’s names, improves outcomes.

The bakery loan

A woman running a home bakery gets a Mudra loan without collateral to buy an oven. Her UPI sales records help her later qualify for a larger loan to open a small shop.

Thinking loans alone solve women entrepreneurs' problems

Markets, skills, childcare and control over funds matter too.

Key takeaways

Women entrepreneurs face collateral, bias, network and time barriers.
Mudra and Stand-Up India support women borrowers.
Digital records help assess creditworthiness.
Training, markets and control over funds improve outcomes.