Key Points:
- Micro, Small and Medium Enterprises (MSMEs) are crucial to India’s economy, contributing nearly 30% to GDP in 2024 and providing large-scale employment.Â
- The government aims to raise this to 35% in 2025, with a strong focus on women-led enterprises.
Status of Women-led MSMEs:
- Women-owned businesses form 20% of all MSMEs in India.
- Their share in total turnover is only ~10%, and investment share is 11–15%.
- Credit gap for women entrepreneurs is ~35%, compared to 20% for men.
- 64% of PMMY accounts belong to women, but they receive only 41% of sanctioned loan amount.
- Over 1.86 crore informal women-run micro enterprises (IMEs) registered via Udyam Assist Portal, yet access to credit remains limited.
Key Challenges:
- Limited access to formal credit and high credit gap.
- Lack of awareness of financial schemes and low financial literacy, especially in rural areas.
- Poor support from banks and local authorities.
- Collateral requirements and property ownership issues act as deterrents.
- Discrimination in loan processing: women need more bank visits than men to get loans sanctioned.
Government Initiatives:
- Pradhan Mantri MUDRA Yojana (PMMY): Offers collateral-free loans to small non-farm businesses.
- Udyam Assist Portal: Helps informal businesses formalize for eligibility under priority sector lending.
- RBI liquidity support: Reduced repo rate (to 5.5%) and CRR cut to enhance credit availability.
Way Forward:
- Targeted financial literacy programs for women entrepreneurs.
- Simplify loan processes and ensure collateral-free access to small loans.
- Strengthen the implementation of schemes through better coordination with banks and local authorities.
- Encourage digital tools and outreach for real-time support and awareness.
- Recent data shows that women-led MSMEs, despite forming 20% of total MSMEs, contribute only about 10% to total turnover, highlighting gaps in financial access.

