Financing women’s enterprises: Unlocking a powerful opportunity for India’s climate and development goals

When Bindu Devi began running her paper plate manufacturing unit in Uttar Pradesh’s Barabanki district, unreliable electricity dictated her business hours. Power cuts limited production, raised costs, and kept her enterprise small. That changed when she gained access to decentralised solar energy. Today, her unit runs longer and more predictably, energy expenses have fallen, and her monthly income has increased by ₹7,000–8,000.

Bindu Devi's situation is not uncommon. Dalmati Devi's sewing center used to suffer from regular power outages that interrupted work during crucial evening times. The availability of dependable solar energy allowed her to prolong her working hours, fulfill orders promptly, and grow her clientele. Her daily income has risen by as much as 40%.

These examples point to a scalable model in which clean, decentralised energy acts as a productivity multiplier for women-led enterprises—advancing income growth while supporting India’s clean energy transition.

India has consistently shown that climate commitment and development progress can advance together. From renewable energy expansion to large-scale livelihood programmes, we, as a nation, have built strong foundations. The next phase of inclusive growth hinges on accelerating women’s economic participation—not as a social objective alone, but as a core driver of productivity, resilience, and development—key imperatives for a Viksit Bharat.

Across India, millions of women run micro and small enterprises that sustain households, anchor local economies, and provide essential services. While modest in scale individually, these enterprises collectively hold immense potential to drive India’s next phase of economic growth. Women own approximately 20–22% of India’s 63 million micro, small, and medium enterprises. The economic upside is significant: A McKinsey Global Institute (MGI) report suggests that fully unlocking women’s entrepreneurship could add up to $700 billion to India’s GDP by 2025.

Public investments and state-led schemes such as DAY-NRLM, Pradhan Mantri Jan-Dhan Yojana, and targeted skilling initiatives have already made meaningful progress in expanding women’s participation in the economy. The next frontier is sustained productivity growth—building on the gains already made to enable women-led businesses to scale, diversify, and generate higher and more stable incomes, while creating pathways to employ more women across value chains.

For many women entrepreneurs, the binding constraint is not capability or demand, but access—to formal finance aligned with women’s needs, to markets, and to reliable inputs such as power. As a result, nearly 80% of women-led enterprises remain concentrated in low-scale, low-return activities despite having the skills and market demand to grow (according to a report by Aspire For Her and Payoneer). This pattern reflects broader systemic exclusion: globally, women-led enterprises face an estimated $1.7 trillion credit gap, and in India nearly 90% of women entrepreneurs have never accessed formal finance due to limited collateral, thin credit histories, restrictive social norms, and financial products—including climate finance—that are not designed to reach women, even when their enterprises deliver strong economic and environmental returns.

Yet evidence from the ground shows that when clean energy access, finance, and enterprise support align, the impact is immediate and measurable.

Uttar Pradesh State Rural Livelihoods Mission’s initiative, ‘Decentralised Energy for Women’s Economic Empowerment-DEWEE’ demonstrates how this can be achieved at scale. This programme supported by local institutions and development partners integrates clean energy deployment with livelihood enablement and gender-responsive financing. Its recognition in the Government of India’s Economic Survey underscores both its effectiveness and its relevance for national policy.

It is clear that we have a huge opportunity: scaling decentralised clean energy through community-based platforms, particularly in rural areas, can simultaneously address energy reliability, enterprise productivity, and employment generation. Evidence from decentralised renewable energy deployments across rural India shows that access to clean, reliable power for productive uses such as agro-processing, cold storage, tailoring, and small manufacturing has led to significant productivity gains, lower operating costs, and more stable incomes, with women comprising a majority of end users in many livelihood-focused initiatives. Platforms such as the National Rural Livelihoods Mission and State Rural Livelihood Missions provide a strong foundation for expanding such proven models across states.

Realising this opportunity will require a financing architecture that explicitly invests in women’s economic potential. A critical step is the creation of clean energy credit lines tailored for women-owned enterprises, supporting investments in decentralised renewable energy and productive-use technologies.

Equally important is collaboration across the financial ecosystem. Banks, microfinance institutions, non-banking financial companies, philanthropic organisations, and climate funds can work together to de-risk lending, lower capital costs, and expand access to finance. Public-private-philanthropic partnerships can play a catalytic role by demonstrating viability, building lender confidence, and accelerating scale.

When women gain access to reliable, clean energy, the benefits extend well beyond individual enterprises. Productivity rises, incomes stabilise, households become more resilient, and communities grow stronger. These outcomes advance gender equity while directly supporting India’s climate resilience and growth priorities.

The evidence is clear: these solutions are no longer theoretical. They are already delivering measurable gains in productivity, incomes, and resilience. The challenge now is scale. By strategically aligning finance, decentralised clean energy, and enterprise support through existing national platforms, India can unlock the economic potential of millions of women and accelerate a more inclusive, resilient, and sustainable growth trajectory.

(Majumdar is MD and Head of Sustainability, HSBC India; Saachi Bhalla is Deputy Director, Gender Equality, Gates Foundation. Views are personal.)