Post by Dr Sandra Portocarrero, Assistant Professor of Management at the Department of Management, LSE, and Rizwan Shaikh, current MSc Social Innovation and Entrepreneurship candidate and Ex UN Women Consultant – IT Specialist.
(FILE) – An archive picture, dated 29 May 2014, shows start-up entrepreneurs Jonnalagadda Madhavi (L) and Sireesha Vasireddy folding paper bags in their factory in Hyderabad, India. The facory, usually staffed with ten employees, produces paper bags for boutiques, schools and shopping malls. Around 124 women entrepreneurs have set up their businesses at the Aleap industrial park which was initially founded by women. Photo: Doreen Fiedler/dpa | usage worldwide (Photo by Doreen Fiedler/picture alliance via Getty Images)
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India has over 700 million women, more than half of whom live in rural or semi‑urban areas. Despite vast differences in religion, caste, language, and socio‑cultural norms that shape their realities, most social programs are still designed as ‘one‑size‑fits‑all’ and are rarely adapted to this diversity. Decades worth of national programs that have targeted the country’s complex culture and geography continue to face uphill battles.
Maternal health initiatives such as Janani Suraksha Yojana (JSY), for example, aimed to decrease maternal and neonatal mortality by facilitating institutional deliveries among underprivileged pregnant women. Yet studies show that Dalit, Adivasi, and Muslim women have much less access to these benefits than others due to social discrimination, language barriers, and remote location. If real local needs are not considered, these initiatives are doomed to fail.
New developments, be it AI for diagnosis or mobile health clinics, may similarly fail to reach intended communities if strong equity measures are not built in from the beginning. What’s missing is power and resources in the hands of the very women who understand these local fault lines best – not only as ‘beneficiaries’, but as designers, community leaders, and entrepreneurs in their own right.
Empowering women is a systemic fix
According to recent research by Yale’s Economic Growth Center, focusing on women’s entrepreneurship offers one of the most powerful levers for change because it starts from women’s lived realities rather than abstract averages. It shows that women-owned firms are more likely to hire other women, creating a “multiplier effect” that draws more women into the labor force.
If we systematically remove the barriers women face in starting and scaling businesses, the boost will go beyond individual entrepreneurs. It would dramatically expand female labor force participation and even push out less productive male-run firms, ultimately improving economic efficiency for the country. This is not just a women’s issue; it is one of India’s biggest economic opportunities left unrealized. When women cannot start or grow enterprises, the gains never materialize for the very rural and marginalized communities that need them most.
An issue brief from the Atlantic Council highlights the intersecting, often invisible barriers that restrict women’s economic participation in India. These include limited access to digital technology, the burden of unpaid care work, poor mental-health and physical-health services, and a heightened risk of gender-based violence. These obstacles aren’t just personal hardships; they’re systemic filters that prevent women from entering or staying in the workforce, reinforcing gender inequality. Addressing this requires more than patchy programs: what’s needed is cross-sector collaboration and targeted public and private investment that confronts the structural nature of discrimination.
A bottom-up correction
Seen this way, women’s enterprises are not a side project within development; they are the correction to decades of top‑down design that treated rural women as passive ‘beneficiaries’ rather than producers of solutions. When Dalit, Adivasi, Muslim or rural women run businesses in health, education, or climate-adaptive livelihoods, they redesign services around the social and geographic barriers that large schemes routinely miss. This is where social enterprises can play a far more intentional role. When women become entrepreneurs, they generate positive spillovers that markets rarely account for, from higher household welfare to stronger community networks and more resilient local economies.
Yet these benefits often remain invisible in traditional policy and investment decisions. Social enterprise theory suggests that social enterprises exist precisely to correct such neglected externalities. They create value by targeting gaps that neither the state nor the market is structured to solve. In India, this means building enterprises that don’t just include women as beneficiaries but recognize women entrepreneurs as an economic force that produces wider social gains. Designing ventures around these overlooked benefits could help shift the system toward outcomes that are both more equitable and more efficient.
Closing the gender capital gap
One of the starkest examples of overlooked benefits is in access to capital. Financial exclusion continues to hold women entrepreneurs back, making the task of closing the gender capital gap both urgent and unavoidable. The Goldman Sachs 10,000 Women India report shows that women-led MSMEs (Micro, Small, and Medium Enterprises) face a loan rejection rate 2.5 times higher than that of male-owned businesses. Many report that loan applications stall because they cannot provide collateral, struggle with lengthy documentation, or encounter subtle bias in how banks assess their creditworthiness. As a result, a large share of women relies on personal savings or informal borrowing to run their enterprises, which keeps them in low growth segments and restricts their ability to scale.
When women do gain access to structured learning and financial support, the results are decisive: graduates of the 10,000 Women Program report higher confidence in managing credit, stronger financial planning practices, and the ability to make growth-oriented investments they previously could not. If social enterprises are serious about correcting neglected externalities, targeting the capital gap is essential, not just through training, but through products and partnerships that change how risk and value are understood for women-led firms. Solutions for financial literacy and risk assessment must be gender-responsive at their core. Enabling women to access financing is not only about fairness, but it also unlocks the broader economic and social gains that follow when women can grow their enterprises on their own terms.
While the number of women entrepreneurs in India continues to rise, the ‘Breaking Barriers’ study finds that most women rely on informal family and friend circles for guidance. The limited exposure to experienced role models and formal support groups often leaves women in social enterprise and STEM fields feeling isolated, heightening the risk of burnout and hindering their ability to innovate or scale efficiently.
From ideas to impact
Executive Director of the Population Foundation of India, Poonam Muttreja, has been a strong advocate for women’s health, reproductive and sexual rights, and rural livelihoods for the past 40 years. She emphasized to us that “As India strives for inclusive and sustainable development, we must recognise that women are not just beneficiaries of social innovation-they are its most powerful drivers.”
According to Poonam, for women social entrepreneurs to move from idea to impact, three shifts are essential:
- First, policy must address the structural barriers that limit women’s mobility, access to capital, and ownership of assets. Until women have equal rights to land, finance, and digital infrastructure, their enterprises will remain constrained.
- Second, our investment ecosystem must change what—and whom—it values. Women-led models are often rooted in community wisdom, care work, and collective leadership, yet these remain invisible in traditional funding frameworks. We need gender-responsive financing that invests in women’s ideas with the same confidence it invests in men’s.
- Finally, we must build enabling ecosystems—networks, mentors, incubators, and markets—that treat women as leaders, not exceptions.
“When women have the resources and freedom to innovate,” Poonam explained, “they don’t just build enterprises; they transform families, communities, and entire development pathways.”
The future of India’s “missing half”
India stands at a historic juncture: its “missing half” can either remain unaddressed in the swelling tide of social innovation, or step into the light as central architects, co-designers and owners of a just future. It must formulate an intersectional program that brings marginalized women into every step to expand digital literacy, reform financing and credit pipelines, ensure safe public transport and childcare systems, and set up mentorship and leadership channels grounded in diverse local realities and research.
The recent launch of the Gender Budgeting Knowledge Hub by the Ministry of Women and Child Development is an excellent step towards embedding gender equality into India’s fiscal and policy framework. This initiative marks a jump in enabling various stakeholders at both central and state levels to make equity-centered decisions. This growing commitment to inclusive governance represents a strong force for the vision of a truly developed India by 2047.
Research from across disciplines, from economics and technology to grassroots activism, makes clear that inclusive innovation is smart innovation. When solutions embrace complexity, use credible data, and trust the leadership of all women, transformation becomes possible at scale.
As the next phase of social innovation unfolds, a central question must guide our work and hope: What would India look like if every woman’s voice was not just heard, but trusted and resourced to lead?
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