India may be striving for global economic leadership, but its progress remains tied down by the exclusion of women from its growth story. 

The data is irrefutable: despite making up nearly half the population, Indian women contribute just 18.6% to the country’s GDP, according to the World Bank. Formal employment remains out of reach: only 16% of women are in regular salaried work, mostly in unpaid or underpaid roles across agriculture, retail, and garment manufacturing. 

Turning to entrepreneurship for economic advancement brings its share of challenges: fewer than 7% of women-led MSMEs have access to formal credit, leaving almost 90% dependent on informal lending. Meeting this gap requires new approaches to capital, and catalytically designed CSR funding is emerging as a powerful avenue to unlock larger and more sustainable financing opportunities for women entrepreneurs. 

Why women’s participation remains low 

While 78% of Indian women have bank accounts (Global Findex, 2021), only 13% actively use them. Most women face structural and systemic challenges, such as a lack of asset ownership and collateral, restricted mobility due to safety concerns and social norms, and various unpaid care and domestic workloads, which reduce the time available for economic activity and restrict their ability to contribute productively. Yet data consistently shows strong financial discipline when women have access to formal financial tools. 

According to RBI’s Financial Inclusion Insights Survey (2023), women’s average savings rate in low-income households is 6-8% higher than men’s, and they are 20% more likely to prioritise precautionary savings. Similarly, NABARD’s All India Financial Inclusion Survey (2022) found that members of self-help groups (SHGs) and microfinance institutions (MFIs) exhibit higher repayment discipline and consistent savings behaviour. This demonstrates that women are reliable and resilient financial participants, provided they have access to supportive ecosystems. 

Moving beyond traditional philanthropy 

Grants have helped marginalised women start small by setting up collectives or micro-enterprises, develop skills and capacities, digital and financial literacy, and enable market and government linkages. Yet, one-time support often falls short of unlocking access to affordable credit from formal financial institutions, given their perceived high-risk and lack of collateral. The staggering financing gap limits their potential to scale, innovate, and create jobs. 

Blended finance offers a more promising alternative. Instruments such as returnable grants, interest subvention, social success notes, and credit guarantees help de-risk private investment, build credit readiness, and increase women’s access to formal credit and markets. 

By combining philanthropic, public, and private capital, blended finance creates structures that share risk, recycle funds, and attract larger investments. It helps reduce lender hesitation, enables collateral-free loans for marginalised women, and builds their credit history, ensuring that philanthropic capital directly expands women’s access to formal finance and long-term economic opportunities. 

In India, blended-finance solutions are already making strides. For instance, the Deendayal Antyodaya Yojana, through the National Rural Livelihoods Mission, has provided revolving funds of ₹20,000-30,000 and community investment funds (CIF) of up to ₹2.50 lakh per SHG, enabling women-led groups to access low-interest or collateral-free loans, build repayment track records, and gradually connect to formal banking systems. 

Globally, similar approaches have shown that blended finance can scale women’s access to formal markets better than traditional grants. The Women Entrepreneurs Finance Initiative, for example, has mobilised nearly $2 billion in bank lending to women-owned businesses from a relatively modest blended finance pool. 

These examples demonstrate how blended finance creates durable, scalable solutions that not only help women access credit today but also reshape financial systems to be more inclusive in the long term. 

CSR as a risk shield for marginalised women entrepreneurs 

When CSR absorbs risk through innovative instruments, commercial lenders gain the confidence to lend to women entrepreneurs, who have long been excluded from formal finance due to a lack of collateral and credit history. For instance, a recent women's entrepreneurship initiative aims to boost the incomes of over 2,000 rural, new-to-credit women entrepreneurs in Rajasthan and Uttar Pradesh. As part of this three-year CSR initiative, funds are being deployed as zero-interest, zero-collateral returnable grants. Transaction and repayment data are being collected through a tech-enabled platform to build the credit history of participants, with the eventual goal of enabling at least 40% women to access credit through formal financial institutions. 

A portion of the funds recovered from the first cycle will be rotated and disbursed to additional women entrepreneurs as returnable grants. The remaining portion will be used to unlock formal finance for participants, depending on their willingness and business performance. 

Another demonstration of this model comes from Gujarat, where a ₹1 crore first-loss default guarantee was deployed to expand credit access for women entrepreneurs in the informal sector. By de-risking lending for financial institutions, this guarantee facilitated the disbursal of up to ₹10 crore in collateral-free loans, benefiting 2,600 women-led enterprises. The blended-finance approach proved particularly transformative: 61% of participants were first-time borrowers who secured loans of up to ₹75,000 for business expansion. The programme's strong repayment rate further underscored the financial resilience and discipline of these emerging participants. 

Importantly, such models can be structured to remain fully compliant with India’s CSR regulations under Schedule VII of the Companies Act, 2013, provided that all funds are channelled through registered implementing partners, utilised strictly for eligible activities such as women’s empowerment and livelihood enhancement, and any repayments or revolving capital are reinvested exclusively for programmatic purposes. At no point do funds return to the donor, ensuring that the entire financial flow remains within the ambit of CSR compliance. 

Innovative finance is no longer an experiment. Evidence shows it can be a powerful lever for companies to help rectify the systemic exclusion of women from India’s growth story. By channelising more CSR capital into blended models that de-risk lending, companies can not only expand financial access but also mobilise an entire ecosystem around women’s economic agency. 

(Lashkari is director and board member, 360 ONE Foundation; Gupta is regional head-corporate advisory, Sattva Consulting. Views are personal.)