Women-owned Micro, Small and Medium Enterprises (MSMEs) hired 11 per cent more women employees than male-owned MSMEs, and one-third of all new jobs created by women-owned MSMEs went to women employees, thus boosting local economies and women's participation in the workforce. These insights came from Kinara Capital's MSME Insights report, ahead of International Women's Day.
The MSME Insights report analysed data from 44,821 MSMEs across six states: Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, and Telangana, and the Union Territory of Puducherry. The report aims to analyse and provide insights into the performance and socio-economic impact of women-owned MSMEs, highlighting their pivotal role in driving economic growth and fostering gender parity in India's entrepreneurial landscape.
Job creation in the MSME sector
Within MSMEs, the services sector contributed the highest number of jobs at 36 per cent, followed by manufacturing at 34 per cent and trading at 28 per cent. Women-owned MSMEs hired 11 per cent more women employees compared to male-owned MSMEs, and women employees filled more than 32.4 per cent of all jobs created by women-owned MSMEs.
63 per cent of new jobs in the manufacturing sector were created by women-owned MSMEs, highlighting their significant contribution to employment generation.
Financial performance and growth
Women-owned MSMEs reported a 12 per cent rise in monthly revenue and a 19 per cent increase in monthly net income, indicating better cost optimisation and income growth compared to men-owned MSMEs.
Women entrepreneurs also saw a 12 per cent rise in their salaries, with a four per cent higher increase compared to male entrepreneurs.
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Loans in women-owned MSMEs
The majority of MSME women entrepreneurs (96 per cent) sought working capital, making it the primary purpose of credit for both men and women-owned businesses. Property improvement accounted for two per cent, while 'Business Development and Others' each constituted one per cent of loan purposes.
Interestingly, only 3.4 per cent of women entrepreneurs defaulted on loan repayment, compared to 4.6 per cent among men entrepreneurs. Women entrepreneurs were also found to have a risk portfolio percentage as low as 2.6 per cent, compared to male entrepreneurs, whose repayment risk was 4.6 per cent.
Hardika Shah, founder and chief executive officer, Kinara Capital, said, "Our MSME Insights data is concrete evidence that financial inclusion of women entrepreneurs is a critical step towards reaching gender parity. Women entrepreneurs demonstrated better repayment of their business loans, created more jobs for other women, and experienced an income increase for themselves. Access to credit is the first step towards financial independence, and we expect this data will inspire more to adopt a gender lens approach to driving financial inclusion and introduce specific women-focused products and services."
