65% of self-employed women in Indian metros have not taken a business loan, with 39% relying on personal savings to fund their enterprises. Among those availing loans, 53% use personal property or gold as a form of collateral; shares and mutual funds are the least used forms of collateral. Bank loans remain the top choice for women looking to fund their business, preferred by 21%, according to a survey by DBS Bank and Crisil India.
Loans from NBFCs are preferred by 3% and around 7% opt for funding from venture capitalists, angel investors, private equity (PE) or fintechs. Self-employed women who do not take loans often rely on their savings or avoid loans due to high interest rates. The reliance on personal funds for business operations increases with age. Among self-employed women, 52% of those over 45 years use their savings, compared to only 36% of those aged 25-35 years.
The survey revealed a significant awareness gap regarding government schemes, with 24% of respondents indicating they were unaware of available options. Additionally, 34% mentioned they had not utilised any government scheme for their businesses.
Among self-employed women who have availed of government schemes, 83% primarily utilise three government schemes: Mahila Udyam Nidhi Yojana, Stree Shakti, and Pradhan Mantri Mudra Yojana.
About 39% of women entrepreneurs utilise cash credit (CC) and overdraft (OD) facilities, followed by corporate credit cards (25%) and property-backed term loans (11%). Only 8% of self-employed women use cash management services for their businesses, according to the report.
The report titled “Women and Finance” is based on a survey conducted to delve into the dynamics of 400 working urban self-employed women across 10 major cities in India.
