Building Systems That Empower: How Policy Can Unlock Women’s Entrepreneurship in India

Real change doesn’t happen by chance—it happens by design. Two models, one in India and one from Rwanda, show us the significance of structured policy frameworks in driving long-lasting, meaningful impact. Also, their effectiveness increases manifold through robust implementation strategies, transparent governance, and active engagement of key stakeholders, including the target audience.   

The Kudumbashree program was launched 25 years ago by the Left Democratic Front government in Kerala as part of the state’s Poverty Eradication Mission. While the state had strong educational and health foundations, women continued to face patriarchal attitudes, gender based crimes, and poor working conditions. The first step was to ensure women’s participation in Gram Sabhas, which increased from 5% (1996) to 90% through targeted inclusion efforts.

Initially, Kudumbashree women started with small-scale activities like making soap and pickles. Over time, training programs helped establish over 30,000 micro-enterprises. A key shift occurred when they moved into farming. Today, Joint Liability Groups (JLGs) cultivate over 50,000 hectares, supported by low-interest loans, subsidies, and government-backed training.

 The Kerala Chicken initiative is a standout success—a cooperative venture led by Kudumbashree, which recorded a profit of ₹100 crore last year. 

The LPG distribution scheme by the Indian Government initially faced skepticism, as it seemed unlikely to shift entrenched firewood-based cooking habits. Yet, over time, it successfully promoted cleaner fuel use, improved women’s health, reduced indoor pollution, and eased the burden of gendered household labor.

When policies are persistent, inclusive, and grounded in reality, their long-term impact can be transformative, even if results take time.

Rwanda’s transformation into a global leader in gender equality demonstrates how intentional policy design—rooted in local needs, strong governance, and accountability—can dismantle systemic disparities.

These examples prove that inequality shrinks not with time, but with deliberate action. For India, these models offer a roadmap to empower women entrepreneurs at scale.

India’s Progress in Gender Inclusive Entrepreneurship: Persistent Gaps Remain

India’s journey, though progressing, still faces systemic hurdles. According to NITI Aayog, India is home to 13.5 million women-led enterprises out of a total of 63 million. Yet, women remain vastly underrepresented in the workforce. If this gap were even partially bridged, an estimated 55 million additional women could join the workforce by 2030, providing a powerful boost to India’s ambition of becoming a $5 trillion economy.

Over 90% of women-led businesses are micro-enterprises that stay micro due to critical design flaws: 

• Weak business models
  
• No access to market research, tech, or branding
  
• Fragile supply chains and seasonal revenues
  
• Lack of capital, mentorship, and mobility support
  

Add to that the underrepresentation in decision-making, limited autonomy, and persistent gender norms, and it’s clear that we’re only scratching the surface.

What Women Entrepreneurs Are Telling Us: Insights from STEP’s Work

At STEP, after five years of working closely with women entrepreneurs, one truth has become clear: while passion and innovation are abundant, the systems meant to support them often fall short. Beyond social norms,  the structural barriers — in funding, approvals, compliance, and growth support continue to limit their journeys.

For example, our flagship program, UnPollute’24,  dedicated to women-led sustainability enterprises, brought forward urgent calls for action.

They asked for:

• Tailored mentorship, funding, and networking programs for women in sustainability.
• Faster approval processes for breakthrough technologies.
• Government tenders that prioritize sustainable, nature-based solutions to drive market demand
• More R&D funding to scale green tech innovations
• Easier access to international markets.
• Simplified compliance for GST, licensing, and patents.
• Tax breaks and grants tailored for the funding challenges of sustainability enterprises.
• Enable startup collaborations with cities and industries to implement green solutions
• Access to government datasets to drive better research, innovation, and problem-solving.

Also, as an SISFS-recognized incubator, we regularly engage with women entrepreneurs seeking initial seed funding. Some of the key challenges they have highlighted include:

• Rigid eligibility criteria set by financial institutions limit access to capital.
  
• Lack of upfront capital support needed for R&D and technology development.
  
• Funding is contingent on proof of concept, which is hard to achieve without initial financial backing.
• High costs of manpower, raw materials, and collaborations before funding can be secured.
  
• Challenges in scaling technology-based solutions due to a lack of resources at the early stages.
  
• Hesitation from financial institutions to back new, disruptive technologies due to perceived risks

Government Initiatives: Noticeable Steps Taken So Far

The Indian government has launched several initiatives to provide financial assistance, mentorship, and a supportive ecosystem.

Launched in 2016, the Stand-Up India Scheme empowers women, SC, and ST entrepreneurs with bank loans (₹10 lakh–₹1 crore) for greenfield ventures. Between 2018–2024, women-led accounts under the scheme grew by 243%, with sanctioned amounts surging 253%, from ₹12,452 crore to ₹43,984 crore.

The Pradhan Mantri MUDRA Yojana (PMMY), launched in 2015, provides loans up to ₹10 lakh to small and micro enterprises, with a significant number of women benefiting. To date, it has disbursed 52 crore loans totaling ₹32.61 lakh crore, showcasing its extensive impact.

The Startup India Initiative (2016) has fostered a supportive ecosystem for all startups, including women-led ventures, through tax benefits, funding, and incubation support. Notably, 48% of recognized startups now have at least one woman director (as of Jan 2025).

Beyond funding, initiatives like NITI Aayog’s Women Entrepreneurship Platform (WEP) build ecosystems—connecting 34,000+ women entrepreneurs to mentorship, networks, and growth opportunities since 2017.

Older schemes like Stree Shakti Yojana (2000), Cent Kalyani, and Udyogini continue supporting women entrepreneurs through loan concessions (up to ₹1 crore), collateral-free financing, and lower interest rates for low-income applicants.

Recommendations: Bridging Policy and Practice – The Role of Incubators

While the government has taken important steps to support women entrepreneurs, much of the ecosystem is still in its early stages of evolution. Many flagship schemes were launched nearly a decade ago, and although their impact is beginning to show, greater momentum is needed.

There’s a pressing need to raise awareness about these initiatives, especially among women in rural areas, small towns, and emerging sectors like sustainability. Simplifying application processes is equally important, as complex procedures often discourage deserving entrepreneurs from seeking support.

Incubators can play a pivotal role in bridging the gap between policy and women’s entrepreneurship. By serving as trusted intermediaries, they can help women navigate government programs more effectively, build stronger enterprises, and drive the next wave of inclusive economic growth.

Empowering women entrepreneurs at scale isn’t just about designing good policies—it’s about ensuring that those policies reach, uplift, and enable women to lead India’s future.