Small Business, Big Impact: Empowering Women SMEs for Success

By Anya Aftab with contributions from Ankita Bhalla

Small and medium-sized enterprises (SMEs) are at the heart of the global economy, representing over 90% of businesses employing up to 70% of the workforce, and driving half of the world's GDP. Despite their critical role, they face a staggering $5.7 trillion financing gap globally, which increases to $8 trillion when including informal businesses.

In India, the MSME landscape reflects global trends, with 63 million MSMEs contributing 30% of GDP and over 40% of exports. They are also a powerhouse for employment, providing jobs to 110 million people. Yet, a financing gap of $333 billion persists.

Beyond these numbers, India’s women entrepreneurs are forging a new path. They lead nearly 15 million MSMEs, predominantly in manufacturing, and are redefining the future with their innovative ventures. However, the financial hurdles coupled with societal bias often make it difficult for women to sustain their businesses, thus calling for targeted empowerment and support.

IFC recognizes the urgency to bridge this gap, particularly for women-owned SMEs. By partnering with India's leading banks and Non-Banking Finance Companies (NBFCs), IFC is committed to enhancing credit access, fostering job creation, and promoting inclusive growth.

This World MSME Day, we celebrate the resilience and success of three women microentrepreneurs in India and spotlight IFC’s partners who are exemplifying how the right support and financing can ignite growth and success. 

Spicing up the Globe

Jimmy Raju

Sector: Food Manufacturing

Banking support: Federal Bank 

When Jimmy Raju started her family’s small pickles business in Marady, near Kerala’s Muvattupuzha town in 1994, her ambition was simple: to build a high-quality pickle company ‘Grandma’s’, in India. The success of Grandma’s hot and lime pickle, named after a cherished homegrown recipe and certified locally as the first branded pickle without preservative, revealed to Raju the potential of expanding into new markets. Two years later, she was well on her path of growth, though the opportunity came with its challenges.

Like many women entrepreneurs, she hoped to export her products far beyond the Indian domestic market but struggled to secure funding initially. Women entrepreneurs too often face challenges in accessing financial services, as Jimmy discovered. With limited assets to pledge as collateral and traditional lenders hesitant to extend loans, she turned to her husband for financial support and steadily built her business, earning the trust of lenders along the way.

Her efforts paid off.

With a fleshed-out business strategy and improved operations history, she approached Federal Bank for a loan. Through the bank’s financing support, Jimmy was able to expand her business beyond regional markets and export to European countries. “This support has been a morale booster in my journey as an entrepreneur,” says Raju. Today, with over 200 employees, Grandma’s is not merely a business, it's a critical source of livelihood for many.  

Since 2006, IFC and Federal Bank have partnered to improve access to finance. Last year IFC invested $117 million in Federal Bank to enhance its capacity to lend to MSMEs and meet the increasing credit needs of entrepreneurs, including women like Raju. This support is enabling the bank to provide nearly 60,000 SME loans, empowering individuals, and advancing women's economic participation.

 Milking the Way to Success

Kulwinder Kaur

Sector: Livestock

Banking support: Moneyboxx and Vivriti Asset management (VAM) 

In Mansa, Punjab, Kulwinder Kaur has been running the family’s independent dairy farm, determined to revitalize the struggling business. Faced with decreasing profits and low milk yields, she knew something had to change. However, securing a loan without any credit history presented a serious challenge.

To tackle this challenge, she approached Moneyboxx, an NBFC that provides small-ticket business loans to micro and small enterprises in rural areas, a largely underserved area by larger banks, to apply for an INR 200,000 (Approx $2400) loan. The support was a welcome change for her family. Moneyboxx provided personalized banking support and crucial business coaching to help improve her credit profile and secure the loan her business required. With this financing, she was able to purchase high-quality cattle breeds, construct cattle sheds, and afford veterinary services.

The support didn't just double her family's income—it revived their livelihood. “I had no prior credit history which made it impossible to get a loan,” says Kaur. But it wasn't just financial aid, it was a partnership with Moneyboxx that ensured she and her business thrived. “The guidance and knowledge I received helped save my business.”

Thanks to this partnership, the farm's daily yield has soared from 20 to 50 liters.

Moneyboxx, an investee company of Vivriti Asset Management, is supported through the Vivriti Retail Assets Fund, a fund backed by IFC, which has facilitated financing for over 73,300 loans to women-owned small businesses in India, including Kaur’s.

Weaving the Way to Financial Independence  

Balpreet Aulakh

Sector: Textile & Apparel

Banking support: Shriram Finance 

Some 114 kilometers away in Moga, Punjab, Balpreet Aulakh, a microentrepreneur, owns another SME. Sippy Aulakh Fabs is a clothing manufacturing company that supports both local artisans and craftsmen alike.

Founded in 2019, Aulakh’s enterprise specializes in stitching and embroidery, providing crucial income for local workers and offering unemployed individuals a chance to earn a living. To keep her clothing business running amid soaring demand and increased operational costs post-pandemic, Balpreet tried borrowing from banks but faced hurdles familiar to many women entrepreneurs. As a businesswoman, she found it tough to establish trust and prove herself as a reliable borrower.

Enter Shriram Finance, a leading NBFC in India specializing in working capital loans for underserved MSMEs in rural India. Backed by IFC, Shriram finance recognized Balpreet’s business potential and supported her with a business plan and provided the funds needed to continue her business. “I feel empowered and happy to inspire other women to become self-reliant, too,” says Aulakh. “Initiatives like these enable women entrepreneurship.”

IFC invested $150 million in Shriram Finance in March 2024 to help ramp up its lending to small-scale entrepreneurs and deepen financial inclusion. The partnership is expected to result in 9 million micro loans and nearly 200,000 SME loans, benefiting smaller businesses in India's underserved markets and prioritizing support for supply chain financing to boost women's participation. 

Beyond the Glass Ceiling

IFC’s work in championing women’s entrepreneurship in the private sector is helping to address gender inequality and to leverage India’s demographic dividend.

Over the past year, IFC’s investment will help clients to extend 30 million micro and SME loans, with over 20 million of these loans, valued at over $15 billion, and $8 billion of this designated specifically for women.

More recently, to support India’s women-led development and foster greater inclusivity in financial markets, aligned with the World Bank Group Group’s Gender Strategy, IFC is taking steps to address the gender gap by integrating women better into business operations, advancing women leadership in corporate and fostering job opportunities. Women and men both need equal access to finance, and this initiative aims to better serve the banking and financing needs of women-owned and managed enterprises across the country.

Along with the government and the private sector, the MSME sector can achieve greater scale, create opportunities for women, and empower more small businesses, especially those led by women—not just on World MSME Day, but every day of the year.