Digital Loans Surge for MSMEs, Yet One-Third of Women Entrepreneurs Face Access Barriers

Despite Growth in Digital Lending, Women Entrepreneurs Encounter Significant Challenges in Securing Credit

While digital loans for Micro, Small, and Medium Enterprises (MSMEs) are expanding rapidly, approximately one-third of women entrepreneurs remain unable to access these financial services. A report by KNN India indicates that 47% of women entrepreneurs in India's MSME sector struggle to obtain credit . This issue is compounded by factors such as limited awareness of government schemes, societal biases, and challenges in meeting traditional lending criteria. Experts emphasize the need for gender-sensitive policies and tailored financial products to bridge this gap and empower women-led businesses.

MSME loan access There are 7.34 crore MSMEs in the country. According to the survey report of SIDBI, MSMEs need a loan of about Rs 123 lakh crore for working capital and investment. Due to various reasons, they are unable to get a loan of about Rs 30 lakh crore out of this. SIDBI has recommended policy initiatives to provide loans to selected segments. There has been an increase in loans to micro, small and medium enterprises i.e. MSMEs, the loan they get through digital platforms has also increased, despite this, this sector is getting 24 percent less loan than required. This credit gap (MSME credit gap) is about Rs 30 lakh crore. Small Industries Development Bank of India (SIDBI) has given this information in a survey report. This credit gap is the highest in the service sector at 27%. Not only this, 35% of the MSMEs of women entrepreneurs are those who are unable to get loans (women entrepreneurs loan challenges). The report recommends policy initiatives for select segments.

In this survey, 2097 MSME units from 19 sectors of manufacturing, services and trading were talked to. According to the report, 18 percent people said that they have taken loan from digital platform (digital loans for MSME). In the year 2017, only one percent of MSME took loan through digital medium. There is a huge opportunity in giving digital loan to MSME as 90 percent people said that they accept digital payment.