Money is instrumental in turning ideas into business ventures, scaling operations and driving innovation. However, accessing business credit is not easy for all entrepreneurs, especially women starting business. However, technology-driven financial entities have emerged as game changers. These are democratising business credit opportunities for a wide range of under-served communities, including women. These tools also play a crucial role in undermining the gender barriers that have traditionally hindered women’s progress in the business domain.
Overcoming the barriers to Financial Inclusion (FI)
One of FinTech’s most critical functions is promoting Financial Inclusion (FI). Women entrepreneurs often face challenges in accessing financial services, including limited access to credit and investment opportunities. FinTech platforms are bridging this gap by offering tailored financial products and services that cater specifically to women’s needs.
For instance, certain companies provide collateral-free business loans to Micro, Small and Medium Enterprises (MSMEs), empowering women entrepreneurs to grow their businesses. Peer-to-peer lending platforms are also making a significant impact by offering affordable credit to under-served communities, including women entrepreneurs in rural areas. This enhanced access to credit has facilitated the growth of women-led startups. As of 2023, 18 per cent of startup Chief Executive Officers (CEOs)/founders were women. This figure shows the potential of FinTech solutions to enable women to overcome traditional barriers to funding and access the resources necessary for business ventures.
Driving women’s growth in tier-II and tier-III regions
The impact of FinTech is not limited to major urban centres. Women in tier-II and tier-III cities also benefit from these FinTech firms. These technology-driven platforms actively promote entrepreneurship in smaller towns and cities by providing women with the tools and resources they need to succeed.
For example, some platforms facilitate social commerce and enable women to start their own businesses by selling products through social networking platforms. This model has empowered women in smaller cities, allowing them to earn an income and achieve financial independence. Due to this, the number of women-owned MSME businesses in smaller cities has reached 20.5 per cent, according to a KPMG report. Digital payment solutions and e-commerce platforms have further simplified business operations for women entrepreneurs in these regions, helping them expand their reach and customer base.
Going beyond the financial support
Beyond financial services, FinTech companies, either alone, or in collaboration with other organisations, host webinars, mentorship programmes, etc., allowing women entrepreneurs to connect, share experiences with each other and learn from one another. These also serve as a mentorship, networking and collaboration platform, helping women navigate entrepreneurial challenges. Several initiatives and applications also offer women entrepreneurs business training along with funding. These resources address knowledge gaps and build confidence and resilience, ensuring women are well-equipped to overcome obstacles and seize opportunities.
The Future of women in FinTech
As we look towards 2025, the role of FinTech entities in empowering women entrepreneurs is poised for further growth. Continued technological advancements and an increasing emphasis on inclusivity will create more opportunities for women to thrive in the entrepreneurial ecosystem. In 2024, the number of women-run businesses reached the 15.7 million mark, constituting 22 per cent of the overall entrepreneurship. With proper support and encouragement, this number could reach 30 million, making the role of FinTech much more critical.
The arrival of FinTech into the entrepreneurial landscape is a gamechanger for women entrepreneurs. These financial entities are paving the way for a more equitable and prosperous business landscape by providing access to financial services, creating supportive communities and promoting inclusivity. As we move forward, the continued growth of FinTech solutions and women-owned businesses is a testament to the power of technology to drive positive change and empower women to achieve their entrepreneurial dreams.
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