Executive Summary

This report is part of a study that IIMA Ventures (formerly IIMA-CIIE), the Innovation Continuum, and the Economic Research Institute for ASEAN and East Asia (ERIA) are conducting to open collaboration and peer learning between India and the Association of Southeast Asian Nations (ASEAN) and share knowledge and tools relevant to entrepreneurship ecosystems in South and Southeast Asia. It dives into the evolution of the entrepreneurial ecosystem in India and ASEAN for rural women and presents a comparative description of some of the major policies. This report is based on the joint roundtable held by IIMA Ventures and ERIA on ‘Women Entrepreneurs: Focusing on the Grassroots’, as well as previous research by both organisations on women entrepreneurs in their respective countries and/or regions.

Key Messages

• Across India and ASEAN, rural women entrepreneurs are a segment that will benefit from deeper ecosystem engagement. When rural women engage in entrepreneurial pursuits to supplement family income, which they often do, they are burdened with the additional charge of overcoming various socio-economic constraints. Ecosystem stakeholders such as financial institutions, government offices, investors, and technology providers must work together to minimise socio-economic frictions in the entrepreneurial journeys of rural women. With access to training, resources (including capital), and technology, businesses owned and led by women could grow – generating employment and inspiring more women towards financial independence.
• A wide gap exists between urban and rural women in terms of access to internet/smartphones and use of technology. A key aspect of aligning rural women entrepreneurs with the urban ecosystem is effectively training them on using smartphones and onboarding them on technology platforms that improve their access to market opportunities, financial services, and overall self-confidence.
• In ASEAN, rural women entrepreneurs do not perceive their economic activities as a business; rather, as something they do in their free time. They also do not view themselves as entrepreneurs, and therefore lack a growth mindset for their businesses. As Lida Loem, Co-founder and Technical Adviser, SHE Investments, explains, asking women hard questions about their businesses pushes them to think about regularising operational functions like book-keeping, accounting, and customer service. Rural women entrepreneurs can also be similarly led to explore forward-looking executive functions like leadership, negotiation, and collaboration. Nudging women to think of and act on one small step towards growing their businesses can give them the confidence they need to grow their businesses.
• According to Ajaita Shah, Founder and CEO, Frontier Markets, it is difficult for women entrepreneurs in rural India to independently scale their businesses. This is because of lack of access to capital, low confidence in their business skills, and limited social support. Organising women’s businesses into collectives like Self-Help Groups1 (SHGs) or co-ownership business models help women develop confidence, share and solve challenges, and learn from each other. Collectivist business models can be explored that (i) allow more private players such as start-ups to enter the rural market and (ii) ensure that profits are shared equitably. Barriers to reaching rural women entrepreneurs should be tackled through intelligent design solutions for creating sustainable models, providing banking opportunities, streamlining market linkages and focusing on developing skills; especially in digital literacy.
• In both India and ASEAN, there is gender disparity in sectoral distribution of women owned businesses. While there is a need to lower barriers of entry to encourage rural women to break into male dominated sectors, it is also extremely important to appropriately promote, and unlock market value and profitability for female dominated sectors. According to Denica Flesch, Founder and CEO, SukkhaCitta, the strong presence of women in rural sectors is a big opportunity to drive sustainable and regenerative business models. Such businesses could be better supported in the long term by customers who are more aware and informed of their purchase choices.
• According to Chetna Shah, Founder and Chairperson, Mann Deshi Bank and Mann Deshi Foundation, rural women entrepreneurs must be brought into the formal banking system to help them effectively unlock opportunities for growth and scaling. Microfinance institutions (MFIs) can be leveraged to this effect. MFIs have great last-mile presence, have less constraints than banks, and offer more flexible products. MFIs can be incentivised to act as a bridge between women entrepreneurs with no credit history and formal lending institutions, thus helping women build creditworthiness and over time assist them move to formal banking institutions, which in turn can give them access to a bigger range of specialised products.
• In India and ASEAN, rural women entrepreneurs are not on the radar of serious institutional investors, predominantly because they are considered as high-risk for a range of reasons. According to Chetna Shah, Founder and Chairperson, Mann Deshi Bank and Mann Deshi Foundation, there is a need to build social impact funds for women-run enterprises. MFIs can close this gap by building and managing collaborations and partnerships with rural banks.