The social enterprise sector is ripe for realizing the multiplier effects of women’s leadership: Women are more likely to hire other women, to focus on women beneficiaries, and to pass on their gains to female family members.
That’s especially true in India, where nearly 25 percent of social enterprises are led by women. By comparison, less than 9 percent of India’s commercial small and medium enterprises have a woman at the helm.
We need more women social entrepreneurs. Addressing this disparity calls for new approaches in gender-lens investing, which considers the impact of financial investments on women, and support for social enterprise. Our recent British Council Activist to Entrepreneur study examined the perspectives of some of the many women social entrepreneurs in India on how to advance these aims. We found that anything short of persistent efforts that challenge existing norms and beliefs—including about social enterprise itself—is unlikely to open up more opportunities.
Social enterprise as self-empowerment
Founding a social enterprise is no small feat, and women in India face the additional barriers of prejudice, discrimination, and family pressure. But those women who surmount these challenges find the outcome empowering. Of the female social entrepreneurs who responded to our survey, a vast majority reported that they had developed increased confidence (82 percent) and an increased sense of self-worth (80 percent) as a result of founding their venture.
Becoming a social entrepreneur can also elevate a woman’s status in her family and community. In our survey, 47 percent of women social entrepreneurs reported increased respect within their families, compared to only 29 percent of their male counterparts. This form of empowerment was particularly significant for entrepreneurs from less-privileged socio-economic backgrounds.
One woman from rural Maharashtra described the transformative effects of becoming a clean energy entrepreneur through the wPOWER India project, which empowers women and women’s groups to supply solar technologies to their local communities. While she had previously faced domestic violence and demands for dowry, becoming an entrepreneur took her outside the home to lead demonstrations of solar technologies at markets, schools, and village meetings. She now runs a profitable business selling solar products in her community.
However, this self-empowerment is sometimes compromised by the societal devaluation of the social sector we discussed in a previous article. Social entrepreneurs from urban, middle-class backgrounds felt an additional burden to prove their educational and professional qualifications. They needed to show their families and communities they had not become social entrepreneurs as a “last resort,” because they could not get a more prestigious or higher-paying position. And about half of the female social entrepreneurs in our study reported that starting a venture had negatively impacted them in some way, most often by increasing their financial insecurity and stress.
Access to finance
With a persistent gender pay gap and lower overall reported rates of pay in the social enterprise sector, most women social entrepreneurs in India likely earn less than their male counterparts and less than their female for-profit counterparts, our report found. They face major challenges accessing funds for their ventures, including the prejudicial assumptions of potential lenders and investors, the types of funding available, and the hurdles of applying for those funds.
Female social entrepreneurs reported facing frequent questions about their personal lives in meetings with potential investors. According to our study, investors ask women questions about marriage and family more than they ask men. Some women felt an explicit bias in these meetings; investors assume women treat their ventures as a lower priority or as a “hobby” that can be abandoned at any time, and thus consider them a riskier investment. One female social entrepreneur who participated in our focus group in Jaipur was flatly denied a loan at a private bank until her husband co-signed. Potential funders criticized another woman in Bhopal for wearing formal Western clothing rather than Indian clothing suggestive of the village context of her work.
Female social entrepreneurs—especially young, unmarried women—even face obstacles accessing financial resources from their own families. While sons of affluent families often approach their parents for capital to start their ventures, young women in similar circumstances report that their families would rather fund their wedding than their business. One young woman who had recently started a social enterprise in the textile sector said of her male relatives, “They are fine with you working and doing well, just as long as you do not outshine them, just as long as you still depend on them.”
By helping more women-led enterprises thrive, the social enterprise sector can help change these mindsets over time. To do this, social enterprise investors and support organizations must not only eschew prejudicial attitudes toward women leaders, but also make funding more easily accessible. The women that participated in our research spoke of this need repeatedly. They wanted grants and loans in smaller denominations, and with less red tape and documentation, to support early-stage, small-scale organizations.
In India, social enterprises run by women tend to be smaller than those run by men. Data collected for a previous British Council survey of the social enterprise landscape indicated that male-led social enterprises are, on average, about two-and-a-half times larger than women-led ones in terms of reported annual revenue. We asked our focus group participants to share what they see as the causes of this disparity. In response, they discussed domestic care responsibilities, restrictions on women’s mobility, and differences in sectors in which women tend, or are encouraged, to start businesses. But some participants turned the question around: Why, they asked, is there such a focus on scale?
Globally, social enterprise funders and support organizations posit scalability as desirable, and even essential, for a social enterprise to maximize its impact. The call for scale arises from the breadth of social need, and substantial growth projections are often a prerequisite for gaining investor interest. But what about smaller social enterprises that create impact tailored to a local area? Participants in the Jaipur focus group in particular—many of whom worked in the handicrafts sector—argued that demands for scale are unreasonable, tied to models from male-dominated sectors such as IT, and prejudicial toward the industries in which women are better represented.
But what if scaling social impact were achieved not by multiplying the size of social enterprises but by multiplying their number? Such an approach would require reconfiguring how funders and support organizations distribute their resources. But it may be what India’s social enterprise sector needs to expand its community of women leaders.
Ensuring that the social enterprise sector can maximize its positive impact on the lives of women and girls in India requires rethinking some assumptions about social enterprise itself. Changing the paradigm from “scaling” a single venture to creating networks of support and knowledge-sharing among smaller ventures might more effectively serve diverse women’s needs through more localized frameworks. And making funds easily accessible for early-stage or small-scale ventures can increase the number of women who can serve as resources for each other and for society.