World Bank study Suggests Creating of Priority Sector for Women-led Rural Businesses

According to a recent World Bank report, India needs to support the creation of a priority sector designation for women-led rural businesses to increase their access to funding and other necessities. The plan seeks to increase economic participation, advance gender equality, and empower women entrepreneurs. The World Bank places a strong emphasis on gender equality in its plan for 2024–2030 to achieve sustainable development and eradicate poverty. According to the report, the strategy will also support female-led, growth-oriented businesses to enhance female labor force participation (FLFP).

The paper authored by Arshia Gupta, Alreena Renita Pinto, and Balakrishnan Madhavan Kutty mentions that "While micro-enterprise financing is covered under the priority sector, the loans are mostly provided to enterprises at the upper edge of the spectrum. The loans to women's enterprises are presently not prioritized separately. To encourage commercial banks, there is a need to further sub-segment the micro-enterprise category focusing on women-owned growth-oriented enterprises."

The authors believe that India's initiatives to assist women-owned businesses primarily target businesses that need to survive, ignoring expansion opportunities. To help growth-oriented enterprises establish their creditworthiness and make financing products possible, they advise introducing them to commercial loans and helping them make investments in digital bookkeeping and payment systems. Proposed institutional reforms aimed at promoting women's entrepreneurship include bolstering decentralized incubation centers, creating associations for women entrepreneurs, and enhancing procurement channels for focused assistance.