39% of self-employed urban Indian women rely on savings to fund businesses

Self-employed women across India allocate 45% of their investments into savings account and gold, revealed a survey

Sixty five per cent of self-employed women in Indian metros have not taken a business loan, with 39% relying on personal savings to fund their enterprises, revealed a joint survey by DBS Bank India and rating agency Crisil.

Of the self-employed women who have not availed a loan, 25% have enough savings and 26% worry about high interest rates.The reliance on personal funds for business operations increases with age. Among self-employed women, 52% of those over 45 years old use their own savings, compared to only 36% of those aged 25-35 years.

Among those who have obtained loans, bank loans were the primary choice, preferred by 21%. A smaller proportion, around 7%, opt for funding from venture capitalists, angelinvestors, private equity (PE) or fintechs.

Women entrepreneurs often use personal assets for collateral, with 28% leveraging personal property and 25% turning to gold—reflecting their risk-averse approach to investments. 64% of respondents who use gold as collateral predominantly invest in safer options like savings accounts and gold.

Self-employed women across India allocate 45% of their investments into savings account and gold. In contrast, 64% of respondents who use gold as collateral predominantly invest in safer options like savings accounts and gold

At least 39% of women entrepreneurs use cash credit (CC) and overdraft (OD) facilities, followed by corporate credit cards (25%) and property-backed term loans (11%). 39% of respondents cited competitive interest rates and flexible repayment terms as key factors influencing their choice of bank for loans.

UPI has played a pivotal role in digitising India’s financial transactions. According to the Reserve  Bank of India, the share of UPI in digital payments reached close to 80% in fiscal 2024. UPI leads in the payment of business expenses, followed by mobile banking. At least 73% of self-employed women surveyed preferred receiving payments from customers digitally, and 87% used digital methods to pay their business expenses. UPI is the most-used mode for both receiving (35%) and paying (26%) business expenses. However, cash remains indispensable for payroll and operational expenses, used by 36% of respondents," said Pushan Sharma, Director-Research, CRISIL Market Intelligence & Analytics.

The survey, conducted among 400 self-employed women across 10 major Indian cities, revealed a significant awareness gap regarding government schemes, with 24% of respondents indicating they were unaware of available options. Additionally, 34% stated they had not utilised any government scheme for their businesses. 

More than half (52%) of self-employed women in Indian metros have implemented sustainability policies in their businesses, while 14% have approached a bank for sustainability-linked finance. Encouragingly, 76% have implemented sustainable business practices, such as energy conservation, incorporating female representation on their boards, and waste reduction and recycling measures. 26% of respondents prioritise energy conservation efforts, while 24% focus on waste reduction and recycling. Additionally, 26% of self-employed women have women on their boards, reflecting their commitment to gender diversity and inclusion. 

At least 37% of respondents stated that they employ teams where over 40% are women—an encouraging sign of gender inclusivity in the workplace. Perceived gender bias among self-employed women stood at 16%, primarily in vendor engagement, networking, and fundraising, accounting for 53% of the total instances.

Retirement planning is a key priority, with 66% saving for their own retirement and 38% offering retirement benefits to their employees.