India’s Invisible Engines: Understanding and Supporting Women-led Nano and Microenterprises

This paper is a supplement to the official CGAP Publication Series "Insight to Inclusion: Understanding Women-Led Nano and Micro Enterprises” (2025).

Women-led nano and microenterprises (WNMEs) are essential to sustaining livelihoods and advancing local economic development across India. However, their growth is constrained by systemic barriers, including limited access to start-up capital, formal credit, digital tools, and support networks. These challenges are further intensified by restrictive gender norms, low asset ownership, and a lack of financial and nonfinancial solutions tailored to their unique needs.

Based on CGAP’s research across six Indian states, this report introduces a segmentation framework that reflects the diversity of WNMEs across eight key dimensions: enterprise size, entrepreneurial mindset, capabilities, household responsibilities, business sophistication, network access, sector, and geographic location. The findings underscore significant gender disparities: women with lower levels of education, weaker social networks, or low record-keeping practices encounter the greatest obstacles to accessing credit. Particularly underserved are nano enterprises that are livelihood-oriented, which face greater exclusion than their growth-driven counterparts.

To address these inequities, the report calls for a comprehensive ecosystem approach. Strengthening the WNME sector in India will require cross-sector partnerships that connect inclusive financial solutions with broader social protection systems and economic development initiatives.

Key recommendations include:

• Applying a segmentation approach informed by behavioral and contextual insights.
• Delivering tailored support based on enterprise size and growth stage.
• Expanding access to semiformal financial services.
• Enhancing availability of start-up capital.
• Narrowing the digital divide.

By enabling coordinated, ecosystem-wide efforts and tailored interventions, stakeholders can unlock the full potential of WNMEs, whether livelihood-driven, growth-aspiring, or growth-oriented. In doing so, they can help build a more equitable and resilient economy powered by women-led enterprises across India.

Disclaimer

This work was commissioned by CGAP and funded in whole or in part by CGAP as part of its Scaling Innovative Finance for Micro and Small Enterprises project. Unlike CGAP’s official publications, the viewpoints and conclusions expressed are those of the authors and they may or may not reflect the views of CGAP staff.