India must Promote Priority Sector tag for Women-led Enterprises: World Bank

By: WE Staff | Wednesday, 3 July 2024

The World Bank's recent study mentions India must promote a priority sector tag for women-led rural enterprises to improve access to finance and essential resources. The strategy aims to empower women entrepreneurs, promote gender equality, and enhance economic participation. The World Bank's strategy for 2024-2030 emphasizes the importance of gender equality in achieving sustainable development and ending poverty. The study further mentions that this initiative will also promote women-led growth-oriented enterprises to accelerate Female Labour Force Participation (FLFP).

Programs like JEEViKA in Bihar have shown significant improvements in financial inclusion and economic activities among rural women. The paper authored by Arshia Gupta, Alreena Renita Pinto, and Balakrishnan Madhavan Kutty mentions that "While micro-enterprise financing is covered under the priority sector, the loans are mostly provided to enterprises at the upper edge of the spectrum. The loans to women's enterprises are presently not prioritized separately. There is a need to further sub-segment the micro-enterprise category focusing on women-owned growth-oriented enterprises to encourage commercial banks."

The authors argue that India's efforts to support women's enterprises majorly focus on subsistence businesses, neglecting growth potential. They recommend introducing growth-oriented enterprises to commercial loans and investing in digital bookkeeping and payment solutions to improve their creditworthiness and enable the development of financing products. Institutional reforms to boost women's entrepreneurship have also been recommended including strengthening decentralized incubation centers, developing women's entrepreneur associations, and improving procurement avenues for targeted support.