Not having the right connections is a big reason for why women owned MSMEs do not grow faster: Saritha Venumbaka, WEConnect International
There is an upward trend because of several factors, the primary one being the changing social dynamics, that are shifting things in favour of women entrepreneurs. However, they still need assistance, says Saritha Venumbaka, WEConnect International.
Anushruti Singh June 27, 2022
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Women owned MSMEs, particularly micro businesses, have grown in India over the years. According to government statistics, the number has increased from 2.15 lakhs in FY11 to 1.23 million in FY21. As a result, the share of women owned MSMEs in the overall MSME base has increased from 13.72 per cent to 20.37 per cent in the last ten years.
It’s a remarkable difference, but we can’t ignore the fact that women owned businesses continue to face numerous challenges for a variety of reasons. Not to mention the fact that the pandemic has thrown many of them into deep water. Simultaneously, various reports highlight a funding gap that is further impeding their growth.
WEConnect International is one of the organisations that is working to uplift women owned MSMEs. It collaborates with over 160 multinational purchasing organisations with a combined annual purchasing power of more than $1 trillion that have committed to sourcing more products and services from women owned businesses in over 130 countries, including India.
Saritha Venumbaka, COO at WEConnect International, spoke to SME Futures one-on-one about supplier diversity, women owned businesses, digital accessibility, and capacity building.
Globally and in India, the role of women in entrepreneurial endeavours has expanded in the past decades. What are the factors behind this growth?
Women’s entrepreneurship has recorded a significant increase in India and across the world. For example, statistics show that about 14 per cent of entrepreneurs in India are women.
There is an upward trend because of several factors, the primary one being that the social dynamics have changed and shifted in favour of women entrepreneurs. Further, research shows that there is a desire among Indian women to be financially independent and move away from their traditional roles, and entrepreneurship is an avenue for financial autonomy.
A second cause of women’s entrepreneurial growth in India is that women are moving from the traditional sectors to streams like STEM, supply chain and logistics. The increase in their information and knowledge combined with the opportunities that have been afforded to them in the newer sectors have served to induce their growth and inculcated a desire among women to become entrepreneurs.
Thirdly, women have access to information and are applying that for creating businesses¾these women are motivated not by necessity but from a deep desire to do something better for themselves, for their communities and for their families.
Fourth, government support is also an important factor, and when we look at today’s government programs, it is obvious that there is a lot more emphasis on gender equality.
Be it from international financial institutions or government programs for promoting girls, all these women-centric schemes are focused on empowering women and creating environments that are supportive of women owned businesses. For example, policies offering tax-rebates in India and in other countries as well for women’s entrepreneurship help in creating environments that support the women who wish to succeed in business.
Fifth, the women entrepreneurs of today have more access to funding. Traditionally, access to financing was restricted for women entrepreneurs but now different types of loan programs, schemes and financial institutions have been established with the sole intent to encourage women entrepreneurs.
While all of these advancements are positive, there is still a lot of work that needs to be done, specifically for supporting women entrepreneurs in gaining access to markets.
Every business owner is trying to sell their goods to buyers, and WEConnect International is helping to connect women business owners with multinational corporate buyers who are interested in supporting women entrepreneurs and diversifying their value chains.
WEConnect International recently hosted events in Mumbai and Bengaluru that acted as match-making sessions for the buyers and the sellers. Governments also play a key role in increasing market access for women entrepreneurs and local governments in India have worked hard to make strides in promoting digitization and globalization in an effort to help all businesses, women-owned businesses in particular, to gain access to new markets for scaling their businesses.
When it comes to the economic side of business ownership, women are still lagging. How are you enabling women owned MSMEs to become competitive in the value chains?
Generally, women’s businesses are linked to the traditional sectors like food processing, textiles, handicrafts and so on. But I would like to tell you that the WEConnect International network has over 15,000 women owned businesses across 130 countries from a wide range of sectors including manufacturing, distribution, professional services, retail, pharma and from other non-traditional sectors as well. Our multinational corporate member buyers are looking to women owned businesses for creative ideas in all sectors, not just in the traditional ones.
At WEConnect International, we assist women owned MSMEs in improving their competitiveness through multiple targeted interventions. Through our capacity-building programs, our women owned businesses develop skills to be competitive and win contracts from large buyers. In fact, in Bangladesh, 78 per cent of the women owned businesses that attended our capacity-building programs funded by The World Bank, achieved an increase in revenues close to 42 per cent.
WEConnect International also provides independent third-party verification about whether a business is 51 per cent owned, managed and controlled by women, and this verification is recognised by our corporate member buyers as a gold standard certification.
Ultimately, the mission of WEConnect International is to drive money into the hands of women owned MSMEs and as a one-of-a-kind organisation, we facilitate the linkages between women owned businesses and our member buyers, ultimately creating business value, the realisation of opportunities and the improvement of both the local and the global economy. When women business owners win, everybody wins.
How are you addressing the need for accelerating digital accessibility among women entrepreneurs?
First and foremost is the identification of women owned businesses. It is very difficult to locate women owned businesses unless they have a huge market and a social media presence. At WEConnect International, we provide free registration for women owned businesses. We have over 170 large multinational corporate member buyers who are advancing supplier diversity and inclusion and want to buy from businesses that are women owned.
WEConnect International’s global women owned business supplier platform creates a unique digital network where the women can do business between themselves and reach the member buyers with whom they would ordinarily not have any connection. Not having the right connections is a big reason for why women owned businesses do not grow faster.
Next comes certification. To get certified, women owned businesses are required to pay a fee based on their location and the size of their business. Certification provides a legitimate base, and it is what our member buyers look for to determine, confirm and validate that the business is 51 per cent owned, managed and controlled by one or more women.
Further comes the capacity-building program. These days, many organisations are providing a plethora of capacity-building programs for women entrepreneurs but what is important is that these programs actually help women owned enterprises in doing business with their buyers.
At WEConnect International, women-centric member buyers are provided with a list of products that they are looking to buy, and our capacity-building programs are tailored towards helping women entrepreneurs to build capacity in order to enter the value chain and do business with the large multinational buyers. Similarly, just like our recent capacity-building programs in Bangladesh, we offer such programs in India and across the rest of the sub-continent as well.
We also work with governments to improve opportunities for women owned MSMEs. One important initiative that governments are employing worldwide, including in India, is creating infrastructure for the digital economy.
These programs are creating an environment to enhance the digitisation of the supply chains. As a result of the increase in digitisation, there is a need for more awareness around cyber-security and for more proficiency with digital technology, both of which are critical components of the in-person trainings that we have been providing to women entrepreneurs in Mumbai and Bengaluru.
Cybersecurity is an important area for any MSME. Do you feel that women entrepreneurs are recognizing the threat that it poses to their businesses?
Talking of cybersecurity, there is a clear and growing threat across the world and in India. The Indian Computer Emergency Response Team (CERT-In) reported more than 2.12 Lakh cybersecurity incidents this year (till February). Those who attended our recent capacity-building courses are very much aware of the risks and have learned the details and the insights about the mitigation tactics that are needed to prevent cyber-attacks. The class also offered tips and best practices for preventing and managing cyber-attacks. I believe that there is a clear awareness among the women MSME owners about this threat, and they are working on it.
What kind of programmes is WEConnect International implementing for women owned businesses in India?
WEConnect International provides women owned businesses with identifications, certifications and connectivity with their corporate buyers and with each other. When buyers do business with women owned businesses, it increases their supply matrix diversity. So, there is a positive ripple effect that is happening across the globe due to these efforts to support women entrepreneurs.
We do extensive ecosystem research before we go into a new country to understand several factors about it, like the landscape for women entrepreneurs there, the positive aspects of the country that promote women entrepreneurship, the key stakeholders there who influence the ecosystem and the prospective buyers from the country who are interested in growing their supply chain. We identify women owned businesses to help them with their capacity building across their marketing strategies, their social media presence and reach, as well as in their internal operations like finance and human resources and we also help to connect them with their buyers.
Women entrepreneurs often do not understand the criteria for doing business with the multinational corporate buyers. Understanding the process and understanding how to promote their respective businesses are integral to the success of women owned businesses. WEConnect International’s programmes are tailored to help them to succeed in the value chain and to raise their awareness.
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WEConnect International also helps women owned businesses to expand their networks. We facilitate “Meet the Members” events both in person and virtually to help women entrepreneurs to connect with each other and with our corporate member buyers. These networking events continue to be one of our most popular offerings because of their unique value proposition and their community-building effects.