flowchart LR A[10-20 women form SHG] --> B[Internal savings] B --> C[Internal lending] C --> D[Bank linkage loan] D --> E[Income-generating activity] E --> F[Repayment & graduation]
91 Women and Rural Entrepreneurship
Two strands of inclusive entrepreneurship anchor India’s policy discourse: women’s entrepreneurship, which mobilises half the population that has historically been outside formal enterprise, and rural entrepreneurship, which spreads enterprise to the 65 % of the population still living in villages. Both are framed by the MSMED Act, 2006; the National Policy for Skill Development and Entrepreneurship, 2015; the Sustainable Development Goals (SDGs) — particularly SDG 5 (gender equality) and SDG 8 (decent work and growth); and a constellation of central and state schemes. Standard textbook references are Vasant Desai, Dynamics of Entrepreneurial Development; Khanka, Entrepreneurial Development; and the Government of India’s Annual Report on MSMEs.
TipWorking definitions
| Term | Working definition |
|---|---|
| Women entrepreneur | A woman who organises and operates a business venture, assumes its financial risk, and exercises managerial control. The Government of India definition requires minimum 51 % female ownership and at least 51 % female employment for the unit to be classified as a women’s enterprise. |
| Rural entrepreneur | A person whose enterprise is established in a rural area, deploying primarily local resources and labour to serve local or extra-local markets. |
| Rural area | An area with a population not exceeding 20 000 (RBI / NABARD definition) or as defined by the Census of India (population < 5 000, density < 400 / km², ≥ 75 % male workforce in non-agriculture). |
91.1 Why Women’s Entrepreneurship?
Women own about 20.5 % of MSMEs in India (MSME Annual Report) but contribute disproportionately to household welfare, child nutrition, and education spend (World Bank, Voices of Women Entrepreneurs). The economic case is articulated in McKinsey’s Power of Parity report (2015) — closing India’s gender gap in labour force participation could add $770 bn to GDP by 2025. The non-economic case is grounded in justice and the constitutional mandate of Article 14, 15(3) and 16.
91.2 Categories of Women Entrepreneurs
TipIndian categories (Khanka)
| Category | Description |
|---|---|
| Affluent | Daughters and wives of business families with capital |
| Pull factors | Drawn by independence, achievement |
| Push factors | Pushed by economic distress, widowhood, divorce |
| Educated / professional | Doctors, engineers, lawyers turning to enterprise |
| Self-employed | Tailors, beauticians, food-makers, artisans |
| Rural / artisan | Crafts, dairy, food-processing, NTFP |
91.3 Problems Faced by Women Entrepreneurs
TipConstraints
| Domain | Constraints |
|---|---|
| Financial | Lack of collateral, low loan sanction rates, dependence on informal lenders |
| Social | Patriarchal norms, role conflicts, mobility restrictions |
| Educational | Lower technical and managerial education attainment |
| Marketing | Limited networks, distance from formal markets |
| Legal | Difficulty navigating compliance |
| Personal | Self-confidence, work-family conflict, lack of role models |
The GEM Women’s Entrepreneurship Reports consistently flag finance and family responsibilities as the top two constraints in low and middle-income economies.
91.4 Schemes for Women Entrepreneurs in India
TipKey Indian schemes
| Scheme | Year | Salient features |
|---|---|---|
| Stand-Up India | 2016 | Bank loans of ₹10 lakh – ₹1 crore to at least one SC/ST and one woman borrower per branch |
| Mahila Coir Yojana | 1994 | Coir Board scheme; 75 % subsidy on motorised ratts |
| TREAD (Trade-Related Entrepreneurship Assistance and Development) | 1998 | Government grants of up to 30 % of project cost via NGOs |
| Mahila Udyam Nidhi | 1992-93 | SIDBI seed-capital scheme |
| Mudra Yojana — Mahila preference | 2015 | About 70 % of MUDRA loans to women |
| Annapurna Yojana | — | Loans for women in catering / food-business |
| Bharatiya Mahila Bank | 2013 (merged into SBI 2017) | Bank for women |
| Stree Shakti Package (SBI) | — | Concessional credit to women-owned MSEs |
| Women Entrepreneurship Platform (NITI Aayog) | 2018 | Online incubation, mentoring, finance |
91.5 Women SHGs and Microfinance
The SHG-Bank Linkage Programme (SBLP), piloted by NABARD in 1992, is the world’s largest microfinance programme — covering over 14 million SHGs and 17 crore households (NABARD, 2024). The Andhra-pioneered Self Employed Women’s Association (SEWA), founded by Ela Bhatt in 1972 in Ahmedabad, demonstrates how trade-union and co-operative models can deliver collective entrepreneurship. Kudumbashree (Kerala, 1998) is the largest women’s mission in Asia. The Grameen Bank (Bangladesh, 1976) of Muhammad Yunus — Nobel Peace Prize 2006 — is the canonical microfinance template, blending joint liability lending with progressive lending.
91.6 Rural Entrepreneurship
Rural entrepreneurship is essential for the triad of objectives — employment generation, regional balance, and curbing migration to cities. M. Gandhi’s Hind Swaraj and the Sarvodaya philosophy framed it as gram swaraj; Khadi and Village Industries Commission (KVIC) under the KVIC Act, 1956 institutionalised it.
TipTypes of rural enterprise
| Type | Examples |
|---|---|
| Agro-based | Food processing, dairy, poultry, fishery |
| Forest-based | Bidi, beedi rolling, sal-leaf plates, MFP collection |
| Mineral-based | Brick-kilns, lime, slate |
| Handicrafts | Pottery, textile weaving, embroidery, brass work |
| Engineering & services | Repair shops, transportation, retail, MFI |
91.7 Problems of Rural Entrepreneurship
The classic seven shortages — capital, infrastructure, skills, technology, market access, raw material, and information — remain the structural barriers. Add to these social caste hierarchies and absentee land-owners.
91.8 Government Schemes for Rural Entrepreneurship
TipKey rural schemes
| Scheme | Year | Function |
|---|---|---|
| KVIC schemes | 1957 onwards | Khadi support, REGP (1995), PMEGP (2008) |
| PMEGP — Prime Minister’s Employment Generation Programme | 2008 | Credit-linked subsidy for new micro-enterprises |
| DDU-GKY — Deen Dayal Upadhyaya Grameen Kaushalya Yojana | 2014 | Skill training and placement of rural youth |
| RSETIs — Rural Self-Employment Training Institutes | 2009 | Bank-supported training centres in every district |
| MGNREGA | 2005 | Wage employment; demand-side stimulus |
| NRLM — DAY-NRLM (Aajeevika) | 2011 | SHG-based livelihood mission of MoRD |
| AGMARKNET | 2000 | Online agricultural market information |
| ONDC | 2022 | Open digital commerce for rural sellers |
91.9 Practice Questions
Q 01 Definition Easy
The Government of India defines a women’s enterprise as one with at least:
View solution
Correct Option: C
Ministry of MSME defines a women’s enterprise as one with at least 51 % female ownership and at least 51 % female employment.
Q 02 SEWA Easy
The Self Employed Women’s Association (SEWA) was founded by:
View solution
Correct Option: B
Ela Bhatt founded SEWA in Ahmedabad in 1972 to organise self-employed women workers in trade-union and co-operative form.
Q 03 Stand-Up India Medium
Under Stand-Up India scheme, the loan amount is in the range of:
View solution
Correct Option: C
Stand-Up India (2016) facilitates bank loans between ₹10 lakh and ₹1 crore for SC/ST and women entrepreneurs from each scheduled commercial bank branch.
Q 04 SHG-Bank Linkage Medium
The SHG-Bank Linkage Programme in India was piloted by:
View solution
Correct Option: B
NABARD piloted SHG-Bank Linkage in 1992; it is now the world’s largest microfinance programme by number of households reached.
Q 05 Grameen Medium
The Grameen Bank in Bangladesh, often considered the model microfinance bank, was founded by:
View solution
Correct Option: B
Muhammad Yunus founded Grameen Bank in 1976 (formally licensed 1983) and shared the 2006 Nobel Peace Prize with the Bank.
Q 06 PMEGP Medium
PMEGP, the credit-linked subsidy programme for new micro-enterprises, is administered by:
View solution
Correct Option: B
PMEGP (2008) is implemented by Khadi and Village Industries Commission (KVIC) at the national level under the Ministry of MSME; KVIBs and DICs implement at state and district levels.
Q 07 Kudumbashree Hard
Kudumbashree, the State Poverty Eradication Mission of women’s collectives, operates primarily in:
View solution
Correct Option: C
Kudumbashree was launched by the Government of Kerala in 1998 and remains the largest women’s empowerment mission in Asia by membership.
Q 08 Match the following Hard
Match the institution / scheme with its function:
| (P) KVIC | (1) SHG-Bank Linkage |
| (Q) NABARD | (2) Stand-Up India |
| (R) MoF (banks) | (3) Khadi and village industries |
| (S) NRLM | (4) Aajeevika SHG mission |
View solution
Correct Option: A
KVIC — Khadi and village industries; NABARD — SHG-Bank Linkage; Banks (MoF) — Stand-Up India; NRLM — Aajeevika SHG mission.
ImportantQuick recall
- Women’s enterprise: ≥ 51 % female ownership + 51 % female employment.
- SEWA (1972, Ela Bhatt, Ahmedabad); Grameen Bank (1976, Muhammad Yunus, Bangladesh).
- SHG-Bank Linkage piloted by NABARD in 1992; Kudumbashree (Kerala, 1998).
- Stand-Up India loan range: ₹10 lakh – ₹1 crore.
- KVIC under MSME runs PMEGP (2008); MoRD runs DAY-NRLM, DDU-GKY, MGNREGA.