Kinara Capital MSME Insights data analysis reveals that Financial Inclusion of Women-owned MSMEs creates more jobs for Women

Kinara Capital MSME Insights data analysis reveals that Financial Inclusion of Women-owned MSMEs creates more jobs for Women
Kinara Capital MSME Insights data analysis reveals that Financial Inclusion of Women-owned MSMEs creates more jobs for Women
  • Women-owned MSMEs Generated 11% more jobs for women than men-owned MSMEs.

  • 1/3 of all new jobs created by women-owned MSMEs hire women employees locally.

  • Women-owned MSMEs demonstrate higher repayment rates compared to male-owned MSMEs.

Bengaluru, March 7, 2024: Kinara Capital, a fast-growing fintech driving vast financial inclusion in the MSME sector, today released MSME Insights, a detailed data analysis of women-owned MSMEs. According to MSME Insights, women-owned MSMEs hired 11% more women employees than male-owned MSMEs. The analysis further revealed that 1/3 of all new jobs created by women-owned MSMEs went to women employees, thus boosting local economies.

Hardika Shah, Founder & CEO, Kinara Capital, said, “Our MSME Insights data is concrete evidence that financial inclusion of women entrepreneurs is a critical step towards reaching gender parity. Women entrepreneurs demonstrated better repayment of their business loans, created more jobs for other women, and experienced an income increase for themselves. Access to credit is the first step towards financial independence, and we expect this data will inspire more people to adopt a gender lens approach to driving financial inclusion and introduce specific women-focused products and services.”

MSME Insights Key Data Findings on Women-Owned MSMEs

  • 1/3 of all jobs created by women-owned MSMEs go to women: Fostering greater participation of women in economic activity is often cited as an effective tool to bring about sustainable growth. The MSME Insights findings echo this conjecture. As per the analysis, women employees constituted over 32.4% of all jobs created by women-owned MSMEs.

    Outperforming male-owned MSMEs by 11%, women entrepreneurs contributed to increased female employment and economic development in their local communities. Women entrepreneurs across all three MSME sectors—manufacturing, trading, and services—exhibited a higher degree of acceptance, as women-owned MSMEs are evidently more receptive to female employees than their male counterparts. The services MSME sector contributed the highest number of jobs at 36%, followed by the manufacturing MSME sector at 34% and the trading MSME sector at 28%.

  • Women MSME entrepreneurs exhibit a higher ability to optimize costs and drive income: When supported with resources, particularly formal credit, women-owned MSMEs showcased a 12% rise in their organization’s monthly revenue. What stood out even more was their ability to drive income growth. Women-owned MSMEs registered a 19% increase in monthly net income, compared to 18% by men-owned MSMEs, indicating better utilization of resources and control over costs.
  • Financial inclusion of women entrepreneurs led to a 12% rise in their salary: The impact of driving financial inclusion for women is not restricted to boosting their ability to improve their organizational income; it has an equal impact on the proprietor’s salary. Women entrepreneurs witnessed a 12% rise in their salaries. In fact, women entrepreneurs experienced a 4% higher rise in their salaries than male entrepreneurs. Improvement, especially in women’s incomes, is often considered conducive to the betterment of communities. According to the United Nations, women spend nearly 90% of their earned income on their families’ well-being, thereby improving access to better nutrition, healthcare, and education.
  • Women entrepreneurs demonstrated higher loan repayment diligence: One of the key aspects that dictates the openness of formal lenders to extend credit is the repayment trend. According to the analysis, while only 3.4% of the women entrepreneurs defaulted on loan repayment, the rate among men was as high as 4.6%. This behavioral pattern was consistent across all states. From a sectoral perspective, women entrepreneurs presented a positive trend in both manufacturing and trading; however, the service sector witnessed a reverse trend.
  • By leading in 3 out of the 6 parameters, the manufacturing MSME sector takes the lead in highlighting women’s prowess: From a sector perspective, women entrepreneurs in the manufacturing sector seem to be outperforming their counterparts by the greatest margin, setting the stage for greater acceptance for women-owned businesses. Out of the new jobs created in the manufacturing sector, 63% were by women-owned MSMEs, and only 58% were by men-owned businesses. Further, with a risk portfolio percentage as low as 2.6%, women entrepreneurs performed better than men in terms of repayment. The repayment risk of male entrepreneurs was as high as 4.6%. From a proprietor salary perspective, women exhibited a 16% rise, 11% higher than men. In fact, women entrepreneurs in the manufacturing sector took the lead compared to other sectors as well, making them the leader in bringing the spotlight on women entrepreneurs.
  • With 96% of MSME women entrepreneurs seeking working capital, it has emerged as the leading business loan purpose: When it comes to loan purposes, both women-owned MSMEs and businesses owned by men indicate a similar trend. Both men and women owned working capital, with 96% of entrepreneurs as the prime beneficiaries of credit. The other reasons were property improvement with 2%, business development, and others with 1% each.

MSME Insights delves deep into the women’s MSME landscape, their performance, and their socio-economic impact with analyzed data from 44,821 MSMEs across six states: Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Telangana, and the Union Territory of Puducherry.

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