International Journal of Management

Women entrepreneurs have emerged as a force for economic growth, innovation, and social transformation worldwide. However, access to adequate finance remains a persistent barrier that limits their full potential,
impeding both business growth and broader economic development. This article explores the global landscape of women entrepreneurship, the financial barriers they face, recent policy and market innovations, quantitative trends, and recommendations for fostering equitable access to finance in 2025 and beyond.

The Global State of Women Entrepreneurship

Women-led businesses comprise nearly 28% of enterprises globally but remain underrepresented in formal entrepreneurship and are overrepresented in the informal sector^[1]. In India, women constitute about 14% of entrepreneurs and manage 20% of all MSMEs (micro, small, and medium enterprises)^[2]. Sub-Saharan Africa and Southeast Asia see similarly significant, but underserved, participation from women in business^[3].

Despite their rising presence, women entrepreneurs still face:

• Lower access to formal financial services
• High rates of self-funding or reliance on informal loans
• Industry concentration in smaller or less lucrative sectors
• Underrepresentation in high-growth and high-tech industries

1. Limited Credit History and Collateral

Many women lack established credit histories or access to assets (like property) for collateral, which traditional lenders demand for business loans. Asset ownership is often registered in the name of male family members in many cultures, compounding this challenge^[4][5].

2. Gender Bias and Stereotypes

Implicit and explicit biases persist in lending institutions. Women applicants may undergo greater scrutiny, be asked for more guarantors, or face doubts about their commitment, especially when balancing business with family responsibilities^[4][5].

3. Financial Literacy Gaps

Women entrepreneurs—especially in rural and developing regions—often have less access to financial education and digital banking tools, limiting their ability to navigate formal lending processes^[6][2].

4. Awareness of Government Schemes

Many women remain unaware of targeted government or non-banking financial schemes that could benefit them, missing opportunities for easier, lower-cost, or collateral-free loans^[4].

5. Venture Capital and Equity Funding Disparities

Globally, women-led startups and businesses attract disproportionately less private equity, angel, and venture funding. Women received just 2.3% of venture capital funding in 2020, despite often achieving higher returns on investment^[7].

Quantitative Evidence: The Credit Gap

Between 2020 and 2024, bank credit to women in India grew notably—from ₹488,459 crore in 2020 to ₹1,169,279 crore in 2024. The proportion of accounts and outstanding credit to women expanded each year, but significant unmet demand persists, especially among first-time and rural entrepreneurs^[9].

Visualizing the Credit Gap and Growth

Table: Growth in Credit to Women by Indian Public Sector Banks (2020–2024)

Case 1: Women in Rural India

Women in rural sectors face significant hurdles in accessing formal credit. Financial inclusion rates among young women entrepreneurs remain low, causing many to rely on informal lending or self-funding, which restricts business growth and innovation^[6]. Targeted interventions—digital banking literacy, group lending models, and integration with national schemes like MUDRA and Stand-Up India—show measurable improvements but require further scaling and awareness^[9][10].

Case 2: Sub-Saharan Africa

In Sub-Saharan Africa, over 90% of women participate in the informal labor force. Entrepreneurs like Jacqueline Darko (Ghana) repeatedly self-fund business ventures due to bank reluctance or stringent collateral demands. Without formal audit records and with informal asset ownership, access to loans for expansion remains elusive^[3].

Case 3: Technology-Driven Financial Inclusion

The rise of fintech and mobile banking enables women to access non-traditional sources of finance—peer-to-peer lending, digital microfinance, and alternative credit scoring. These innovations, combined with gender-focused lending programs, are helping bridge the finance gap, especially where digital infrastructure and education are improving^[11][12].

Government and Multilateral Initiatives

• Women Entrepreneurs Finance Initiative (We-Fi): Backed by 14 governments and multiple development banks, We-Fi supports nearly 400,000 women with financial products, market access, and training worldwide^[13].
• Indian Initiatives: Expansion of collateral-free loan programs and new 2025 schemes to offer up to ₹2 crore in loans to 500,000 women, SC, and ST entrepreneurs over five years^[9].
• Women Entrepreneurship Platform (WEP): Offers financial linkages, mentorship, grants, and personalized government scheme guidance for Indian women^[10][14].

Financial Sector Solutions

• Alternative Lending: Collateral-free and gold-backed loans tailored for women have gained prominence, leveraging traditional savings (like household gold) as assets^[15].
• Credit Guarantee Schemes: These reduce risk for banks in lending to women, encouraging higher credit disbursal^[9][10].
• Integrated Digital Platforms: One-stop portals for accessing multiple government schemes, digital loan applications, and approval tracking^[9].

Private Sector and NGO Actions

• Mentorship Networks: Pairing women with female leaders and providing access to knowledge-sharing platforms, facilitating both business and finance literacy^[13][1].
• Open Banking and APIs: Tech innovation for easier process integration, reducing documentation hurdles and bias in screening^[1][11].

Impact Assessment

• Women are 56% less likely to be formal entrepreneurs but 63% more likely to operate in the informal sector, often due to access barriers and high compliance costs^[16].
• Where targeted financial inclusion initiatives are present, women's rates of formal entrepreneurship, business growth, and income diversification rise sharply^[1][12].
• A $12 trillion boost to global GDP is possible by 2025 with enhanced support for women-led enterprises^[17][2].

Best Practices and Recommendations

• Double Down on Financial Literacy: Implement wide-reaching, culturally sensitive financial education tailored to women’s needs.
• Expand Digital Access: Scale affordable mobile banking, digital loans, and fintech solutions, especially in rural and underserved areas.
• Promote Asset Ownership for Women: Reform property and inheritance laws to ensure women can independently own and leverage assets for collateral.
• Incorporate Gender-Disaggregated Data: Collect and act on gender-specific banking data to identify gaps and measure outcomes in lending and support^[1].
• Build Community Networks: Foster peer groups, mentorship, and digital forums to enable knowledge sharing and aggregate demand for group lending.
• Support Policy Innovation: Strengthen regulatory incentives, loan guarantee schemes, and digital onboarding processes while addressing cultural and systemic barriers in traditional finance.

Women entrepreneurs are indispensable to the future of economic growth and equity. Yet, persistent and often systemic barriers to finance slow their progress and limit whole economies’ potential. Rapid evolution in governmental policy, digital infrastructure, alternative lending, and market practices is beginning to close the credit gap—but there remains profound, urgent work ahead. Collaborative action by banks, policy makers, technology providers, and women leaders themselves is essential to achieve full financial inclusion and gender parity in entrepreneurship by 2030 and beyond.

1. Women Entrepreneurs Finance Initiative (We-Fi). “Women Entrepreneurs Finance Initiative.” We-Fi, 2022. 2. Press Information Bureau, Government of India. “Government has taken several initiatives to facilitate ease of access to credit.” pib.gov.in, 2025. 3. Bennett, D. “Ensuring Access to Finance for Women Entrepreneurs.” T20 Policy Brief, 2023. 4. Kumarasamy, D. “Access to Finance and Young Women Entrepreneurs: Driving Sustainable Livelihood in Rural India.” Asian Development Bank, 2025. 5. NITI Aayog. From Borrowers to Builders: Women’s role in India’s financial growth story, 2025. 6. Shriram Finance. “Challenges Women Entrepreneurs Face in Securing Business Loans.” shriramfinance.in, 2024. 7. OECD. “Financial Inclusion and Women Entrepreneurship.” OECD Publishing, 2017. 8. FAO. “Bridging the gap between women entrepreneurs and financial institutions.” FAO Africa News, 2024. 9. Women’s World Banking. “Policy Approaches to Empower Women Entrepreneurs.” WomensWorldBanking.org, 2024. 10. IFC. “IFC Partners with Arnur Credit to Expand Access to Finance for Women Entrepreneurs.” ifc.org, 2025. 11. Nucleus Commercial Finance. “Levelling the Playing Field: Funding Solutions for Women-Owned Businesses.” nucleuscommercialfinance.com, 2025. 12. Sherwani, F.K. “Determinants of financial inclusion among women-owned businesses in India.” Emerald Insight, 2024. 13. We-Fi. “The Case for Investing in Women Entrepreneurs.” we-fi.org, 2022. 14. BusinessWorld. “Bridging The Gap: Finance Innovations For Women Entrepreneurs.” businessworld.in, 2024. 15. UNDP. “Women’s Entrepreneurship and Access to Finance.” UNDP GSF Report. 16. LinkedIn Pulse. “Women are Still Facing Barriers When Seeking Business Funding from Traditional Lenders.” LinkedIn, 2023. 17. ETGovernment. “Empowering women entrepreneurs: Financial policies unlock market potential of ₹35 trillion.” government.economictimes.indiatimes.com, 2024. 18. UNCDF. “UNCDF Gender Financing Case Studies.” uncdf.org. 19. We-Fi. “Innovative Financing Solutions to Unlock Access for Women.” we-fi.org, 2025. 20. Women Entrepreneurship Platform (WEP). “Women Entrepreneurship Platform.” wep.gov.in.