Challenges and Aspirations of Women Entrepreneurs in Tier II and III Cities
Seventy percent of women entrepreneurs in India, particularly those based in tier II and III cities, are eager to improve critical business skills such as finance, marketing, and digital expertise to scale their ventures. This insight comes from the Bharat Women Aspiration Index (BWAI) 2025, released by the UK-based financial platform Tide on April 28, 2025. The survey, which gathered responses from over 1,300 women business owners aged 18 to 55 years across smaller towns, offers a comprehensive view of the hurdles and opportunities these entrepreneurs face.
Women entrepreneurs in India’s smaller cities are emerging as a driving force in various sectors, yet they continue to face significant challenges that hinder their growth. The survey highlights a key finding: while 52% of these women entrepreneurs operate in digital sectors like retail, e-commerce, and edtech, they still feel the need for more advanced skills in areas like finance and digital literacy to move forward. The report underscores the growing demand for skill development among these entrepreneurs as they strive to compete in a fast-evolving business landscape.
The Growing Role of Tier II and III Entrepreneurs
The BWAI 2025 reveals that the entrepreneurial ecosystem in India is shifting away from major metropolitan hubs, with more women starting businesses in tier II and III cities. Around 83% of women entrepreneurs surveyed hailed from these smaller towns, and the majority of them are young, with Gen Z and millennials driving the trend. This demographic is not only tech-savvy but also highly motivated to grow their businesses. Despite their aspirations, these entrepreneurs face challenges rooted in structural gaps in finance, access to networks, and visibility.
In fact, the report shows that 54% of women business owners believe that financial institutions perceive them as less creditworthy than their male counterparts. This perception continues to impact their ability to access necessary capital, despite their growing presence in the business world. What’s more concerning is that many women still rely on male family members to access credit, with 52% reporting that they need a male’s involvement to secure financial support.
The Digital Skills Gap
Despite the growing presence of women in digital sectors, there remains a significant gap in digital literacy. Only 12% of the women surveyed considered digital skills a priority, suggesting a mismatch between the high demand for tech-savvy entrepreneurs and their own perception of skill development. This is a critical issue, as many of these women run businesses in industries that are becoming increasingly reliant on digital tools, from e-commerce to online education platforms.
Given the global shift toward a digital-first economy, this gap in digital skill development could pose a barrier to the growth and sustainability of these businesses. Addressing this issue requires concerted efforts from both government and private sectors to provide training, resources, and mentorship for women entrepreneurs in smaller cities. There is an urgent need to equip these women with the skills necessary to thrive in an increasingly digital business environment.
Financial Hurdles and the Need for Networking
One of the most significant challenges women entrepreneurs in tier II and III cities face is access to finance. A large portion of them believe that financial institutions do not view them as equals when it comes to creditworthiness. In fact, the report found that 54% of women entrepreneurs feel that they are unfairly perceived as less creditworthy than men. This creates a barrier to obtaining the necessary funding to scale their businesses.
Additionally, the lack of networking opportunities further exacerbates these financial challenges. A staggering 86% of women entrepreneurs reported that they rarely or never participate in business networks, cutting them off from the peer support and guidance needed to grow their ventures. Networking can be a powerful tool for gaining knowledge, building relationships, and accessing new opportunities, but for many women in these cities, it remains a distant goal.
Addressing the Challenges and Embracing the Opportunities
The findings of the BWAI 2025 survey paint a picture of women entrepreneurs who are ambitious and eager to succeed, but who face persistent barriers to achieving their goals. These entrepreneurs, despite their drive and digital awareness, are held back by traditional gender biases, limited access to credit, and insufficient opportunities to network and learn from their peers.
To unlock the full potential of these entrepreneurs, it is essential for policymakers, financial institutions, and tech companies to take action. This could involve creating more accessible credit facilities for women, offering targeted digital skill development programs, and establishing mentorship and networking platforms that connect women entrepreneurs in tier II and III cities with industry experts and successful entrepreneurs.
As the report suggests, addressing these challenges could not only empower women in smaller cities but could also lead to a thriving entrepreneurial ecosystem across India. The key lies in creating an inclusive environment that encourages women to reach their full potential, ultimately contributing to the country’s overall economic growth.
