Breaking the Funding Glass Ceiling: Investigating Financial Exclusion of Female Entrepreneurs in India
Abstract
This research examines the persistent financial exclusion of female entrepreneurs in India, identifying the structural, institutional, and sociocultural barriers that constrain their access to formal sources of capital. Although the number of women-led enterprises has grown significantly across diverse sectors- including technology, agriculture, healthcare, and education- systemic inequities in funding access continue to undermine their potential for expansion and sustainability. The study finds that key determinants such as age, level of education, stage of enterprise development, and geographical location profoundly influence the likelihood of securing formal finance. Entrepreneurs who are younger, less formally educated, at early venture stages, or operating in rural regions experience the highest levels of exclusion. These challenges are compounded by restrictive collateral requirements, inconsistent documentation practices, and gendered biases embedded in lending protocols. Consequently, a substantial proportion of women entrepreneurs remain reliant on informal financing networks, driven by accessibility, distrust of formal institutions, and previous experiences of rejection. While some government schemes have yielded positive outcomes, gaps in awareness, inconsistent outreach, and perceived inefficiencies limit their impact. Gender-specific constraints- such as intrusive personal questioning and implicit bias during credit evaluation- further reinforce the “funding glass ceiling” that characterizes women’s entrepreneurial journeys in India. The study underscores the necessity of integrated interventions, including gender-responsive lending frameworks, targeted financial literacy programs, and enhanced policy communication strategies. Addressing these barriers comprehensively is essential for cultivating an inclusive financial ecosystem, advancing women’s economic empowerment, and contributing to India’s broader agenda of sustainable and equitable growth.
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