Most Self-Employed Women in Indian Cities Fund Businesses from Personal Savings. (Representative image)
65% of self-employed women in Indian metros have not taken a business loan, with 39% relying on personal savings to fund their enterprises.
DBS Bank India, in collaboration with CRISIL, has unveiled the third report in its ‘Women and Finance’ series. Based on a survey of 400 self-employed women across 10 major Indian cities, the report reveals insights into their circumstances and experiences as entrepreneurs.
Women entrepreneurs in India, challenges and opportunities; Key findings of the report;
Sources of Business Funding:
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 who have obtained loans, bank loans were the primary choice, preferred by 21%. Women entrepreneurs often use personal assets for collateral, with 28% leveraging personal property and 25% turning to gold—reflecting their risk-averse approach to investments.
64% of respondents who use gold as collateral predominantly invest in safer options like savings accounts and gold.
Awareness of government schemes:
The survey revealed a significant awareness gap regarding government schemes, with 24% of respondents indicating they were unaware of available options. Additionally, 34% stated they had not utilised any government scheme for their businesses.
Banking products:
39% of women entrepreneurs use cash credit (CC) and overdraft (OD) facilities, followed by corporate credit cards (25%) and property-backed term loans (11%). 39% of respondents cited competitive interest rates and flexible repayment terms as key factors influencing their choice of bank for loans.
Support beyond financial assistance:
Beyond financial support from banks, women entrepreneurs expressed a desire for mentorship (26%), support in navigating government schemes (18%), and assistance in digitalising financial processes (15%). In terms of business enablement, 18% were interested in women-based communities, and 13% sought access to industry-specific financial data and benchmarks.
Divyesh Dalal, Managing Director & Head – Global Transaction Services, SME and Institutional Liabilities, DBS Bank India, said, “The insights highlight key areas where we can make an impact. We see opportunities to boost awareness and adoption of government entitlements through education and training. Additionally, it underscores the need to build entrepreneurial ecosystems with networking platforms and communities that foster collaboration, mentorship, skill-building, and knowledge exchange to accelerate growth for women in business.”
Trends in digital payments:
UPI has played a pivotal role in digitising India’s financial transactions. According to the Reserve Bank of India, the share of UPI in digital payments reached close to 80% in fiscal 2024. UPI leads in the payment of business expenses, followed by mobile banking.
Pushan Sharma, Director-Research, CRISIL Market Intelligence & Analytics, said, “73% of self-employed women surveyed preferred receiving payments from customers digitally, and 87% used digital methods to pay their business expenses. UPI is the most-used mode for both receiving (35%) and paying (26%) business expenses. However, cash remains indispensable for payroll and operational expenses, used by 36% of respondents.”
Adopting sustainable business practices:
The insights underscore a growing trend toward sustainability. 52% of self-employed women in Indian metros have implemented sustainability policies in their businesses, while 14% have approached a bank for sustainability-linked finance.
Encouragingly, 76% have implemented sustainable business practices, such as energy conservation, incorporating female representation on their boards, and waste reduction and recycling measures. 26% of respondents prioritise energy conservation efforts, while 24% focus on waste reduction and recycling.
Additionally, 26% of self-employed women have female members serving on their boards, reflecting their commitment to gender diversity and inclusion. 13% have adopted practices related to water conservation and rainwater harvesting.
