ADB, Japan to Support India's 'Missing Middle' Group of Women Microentrepreneurs

MANILA, PHILIPPINES - The Asian Development Bank (ADB) and Japan are providing funds to help build up the skills and capacity of low-income women microentrepreneurs in India who currently lack the cash and know-how to expand their businesses.

A grant of $3 million from the Government of Japan-financed Japan Fund for Poverty Reduction, administered by ADB, will be used to help women entrepreneurs in the states of Madhya Pradesh, Maharashtra, Orissa, Rajasthan and Uttar Pradesh, access financial resources and market opportunities to boost incomes and improve their quality of life.

The target group will be women whose businesses have outgrown traditional microfinance support, but who are unable to access more conventional bank financing – the so called ‘missing middle’ group of the small enterprise sector, which forms the lifeblood of India’s informal economy.

The grant will be used to train up to 1,200 low-income women entrepreneurs in financial literacy, business management and other skills, while assistance will be given to Small Industries Development Bank of India (SIDBI) and its partner microfinance institutions to review and revise their gender policies and practices. Support will also be given to SIDBI’s partners to help remove some of the current constraints faced by women entrepreneurs in accessing financial services, and a monitoring and evaluation system will be put in place to measure the gender-related results of grant activities.

The project has several innovative features including an integrated approach to microenterprise development, the recruitment of women as livelihood enterprise learning advisors, and the establishment of a rating system for micro businesses.

“Helping microfinance institutions develop strategies to mainstream gender issues and approaches in business development will nurture women’s microenterprises, resulting in self-sufficiency which can stabilize poor families,” said Francesco Tornieri, Social Development Specialist (Gender and Development) in ADB’s South Asia Department.

The grant is linked to the ADB-financed Micro, Small and Medium Sized Enterprise Development Project which includes a $50 million loan and $250 million partial credit guarantee facility, designed to boost the small business sector. Activities will be coordinated closely with central and state government agencies, women’s groups, nongovernment organizations and other development institutions. Additional funds of $108,000 from Government of India and $106,700 from beneficiary communities will be provided for a total grant cost of $3.214 million.

The grant will be disbursed over three years to 2012, with India’s Ministry of Finance as the executing agency and SIDBI the implementing agency.