Women Founders Face Loan Barriers, Turn to Digital Solutions for Credit Access: GIM Research

By: WE staff | Monday, 18 August 2025

• Research carried out by the Goa Institute of Management shows women entrepreneurs face more challenges than men to obtain formal loans
• Women are encountering biases while accessing banks, government institutions, and other formal financial institutions
• These barriers curtail the possibilities of women achieving self-reliance and business growth

A recent study by the Goa Institute of Management (GIM) has found that women entrepreneurs have a harder time than men obtaining formal loans, which pointed to a long-standing gender gap in access to credit.

The problem, usually based on biases in banks, the government, and other institutions, is a major hurdle for women looking for self-sufficiency and business expansion.

The study, released in the journal Applied Economics, examined data of 4 lakh unorganised sector enterprises from the 2022-23 survey round of the National Sample Survey Office's (NSSO) Annual Survey of Unincorporated Sector Enterprises (ASUSE).

The study confirmed a distinct difference between men and women regarding access to formal credit.

Encouragingly, the survey also observed that women business owners that use digital financial technologies like internet banking and online financial services are more capable of overcoming these barriers, bridging the gender gap in access to credit.

Financial institutions have to become more proactive in encouraging entrepreneurship among women, according to Ashay Kadam (Banking, Insurance and Financial Services, GIM).

"Any discrimination based on caste or gender in the loans extended greatly restricts the amount of good that financial institutions can do with the credit they extend."

Dr. Swarna Parameswaran (Economics, General Management and Public Policy, GIM) also shared the same opinion and observed:

"Access to formal finance is critical for development and growth of women entrepreneurship in India. While women are disadvantaged relative to men, digital technology holds out hope of bridging the gap."

The experts emphasized the necessity of financial literacy, especially regarding online banking and financial instruments. Though fintech innovation has expanded at a brisk pace, awareness and adoption by women entrepreneurs in the unorganised segment have been behind.

Ashay further asserted that similar investment is required in knowledge sharing and financial literacy at the ground level to ensure women also derive the benefits from these technologies.

The study suggests:

• Reviewing banking and supervision policies for ending gender imbalance
• Facilitating greater usage of digital banking services in order to overcome information asymmetry and avoid repeated visits by clients to financial institutions
• Introducing special schemes and government-supported funds to promote digital adoption for women-led businesses in the unorganised segment

The reports affirm that although women still encounter systemic barriers to accessing credit, digital finance has the potential to be a strong leveler, unlocking entrepreneurship potential, and fueling inclusive economic development.