The Micro, Small & Medium Enterprises (MSME) entities that are owned by the women players are steps ahead in hiring women employees compared to those owned by the men players, a recent report said.
According to MSME Insights released by the Kinara Capital, the women-owned MSMEs hired 11% more women employees than male-owned MSMEs and one-third of all new jobs created by women-owned MSMEs went to women employees boosting local economies.
Women entrepreneurs outperform men in terms of repayment
The report also highlighted that 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.
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 the sectoral perspective, women entrepreneurs presented a positive trend in both manufacturing and trading; however, the service sector witnessed a reverse trend.
However, when it comes to loan purposes both women-owned MSMEs and businesses owned by men indicated a similar trend. For both men and women owned Working Capital with 96% of entrepreneurs stood as the prime purpose of credit.
The other reasons were Property Improvement with 2% Business Development and Others with 1% each.
Manufacturing, Trading, and Services exhibited higher degree of acceptance
The report highlighted that 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 of Manufacturing, Trading, and Services, exhibited a higher degree of acceptance as women-owned MSMEs are evidently more receptive to women 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%.
From a sector perspective, women entrepreneurs in the manufacturing sector seem to be outperforming their counterparts by the greatest margin and 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, the report said.
Women’s financial inclusion led to 12% rise in their salary
The impact of driving financial inclusion of women is not restricted to boosting their ability to improve their organizational income; it has an equal impact on the proprietor’s salary.
As per the report, the 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.
Notably, 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.
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.
