Role of Microfinance in Empowering Women Entrepreneurs

Abstract

This study explores the role of microfinance in empowering women entrepreneurs in India, highlighting its economic and social impact. Despite women owning only 13.76% of enterprises, microfinance has emerged as a key driver in bridging gender gaps by providing collateral-free loans, savings, and insurance services. The research shows that Self-Help Groups, Joint Liability Groups, Microfinance Institutions, and government schemes like MUDRA, Stand-Up India, and DAY-NRLM have significantly expanded women’s access to credit. Case studies demonstrate how microfinance has enabled women to start or expand businesses in tailoring, farming, and handicrafts, while also improving household income, education, and healthcare outcomes. Furthermore, microfinance fosters collective solidarity, reduces gender-based violence, and builds leadership capacity. However, challenges such as over-indebtedness, digital exclusion, and lack of business skills persist. Comparative analysis with Bangladesh, Kenya, and Peru suggests that integrating finance with training and digital inclusion can further strengthen outcomes for women entrepreneurs in India.