Women-led Small Businesses Need Urgent Help From The Government, Finds Survey

The COVID-19 pandemic has impacted women-led micro businesses in India badly, as found by a collaborative study by Global Alliance for Mass Entrepreneurship (GAME) and research agency LEAD at Krea University. The survey, which started in May and will end in January 2021, recommends governments, banks, and other financial institutions to immediately follow effective gender-sensitive policy responses to improve the situation.

According to the PTI, the gender specific results were for the data collected between July and August, covering about 1,800 micro enterprises across Delhi, Haryana, Punjab, Uttar Pradesh, Tamil Nadu, Gujarat, Maharashtra, and Rajasthan.

“The study monitors key trends on the impact of the crisis and government-mandated lockdowns on business livelihoods, employment, and the income of nano and micro businesses. According to the survey, women-led micro and small businesses are particularly at risk because they include smaller companies working in lower-margin markets and are more prone to face instability than micro businesses led by men,” it says.

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Out of the women-owned enterprises that participated in the survey, 43 per cent reported less than Rs 10,000 profit a month whereas only 16 per cent of those owned by men fall in this category. Likewise, 40 per cent of women-owned enterprises are self-run with no workers while the corresponding number for men is 18 per cent. Additionally, 19 per cent women-led enterprises reported scaling up their businesses, while 79 per cent reported reduced customer footfall and low sales.

The PTI report added that 63 percent of the women-led businesses that participated in the survey did not have cash reserves to manage their expenses during the crisis. “Due to operational inefficiencies, collateral requirements, and lack of digital data trails, banks hesitate in lending to women (and hence women entrepreneurs tend to rely more on informal loans),” it stated.

Another finding from the study is that market shocks add further financial distress and render enterprises more averse to risk. In fact, 80 per cent did not take any enterprise related loan during the lockdown and more than two-thirds respondents dipped into personal savings and business cash reserves, the survey revealed.

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