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Investing in a woman-led entity has proved to be less risky: Federal Bank's Shalini Warrier


By Geetha Jayaraman

Women participation the workforce in India is woefully low and encouraging women to create a job is often considered as the ideal way to bridge the gap. Speaking on the sidelines of the ‘Women Startup Summit‘, organised by the Kerala Startup Mission (KSUM), Shalini Warrier, COO, Federal Bank speaks about the need to build an eco-system that boost self-confidence and provides institutional infrastructure for women entrepreneurs in India.

Economic Times (ET): What are your views on women entrepreneurship in India and how do you see that evolving?
Shalini Warrier (SW):
From an entrepreneurship prospective obviously the statistics are very bleak. There are just 14 percent of women entrepreneurs in India. There is still a large deficit and a huge gap to fill before we get to the stage we want to. There are two parts which I believe needs to be addressed and resolved. First and foremost, we need to build enough self-confidence in women to believe that they have it in them to make it as an entrepreneur.

We lose out a lot of our women talent because either they come from an educational system or family structure that doesn’t empower them enough. That’s where summits like Women Startup Summit play a significant role. It gives them the confidence that there are entrepreneurs who they can approach for help and there are people who can mentor them. Therefore, we need to build an eco-system that encourages more participation from women entrepreneur.

Secondly, we need to create an institutional infrastructure that enables women to participate more. We need to create incubators and accelerators through angel networks that specifically focus on women entrepreneurs. From a Fintech prospective, I can relate to the latter part. So, what Federal Bank and a lot of other banks are doing is we are providing the necessary institutional infrastructure. In a way, we are making it easier for women entrepreneurs to literally experiment with their ideas with less risk of failure.

ET: While a certain degree of failure is given, how do you reduce the risk of it happening?
SW:
We create an API system and put them in a sandbox environment. So, it lets you literally plug and play your product, experiment with your product and see whether the product is likely to work or not. The API sandbox makes it possible to reduce the cost and risk associated with it. So, the risk of failure is lowered to a large extend. We also provide them with mentoring and training during this process. So, between building your own self-confidence, getting necessary tools to build that self-confidence to getting the institutional infrastructure that banking and other institution are doing, the path ahead will become easier.

ET: So, do you see a growth in the number of women entrepreneurs in the near future?
SW:
There won’t be a rapid growth. But, unless we don’t invest now, it will never happen. I think it will take us another 5 years to reach say a 25 percent mark in participation from women entrepreneurs in India.

ET: What role can traditional bank play compared to other investors like angel investors and VCs? And, is it perceived that investing on women entrepreneur have greater risk?
SW:
Investing in a woman-led entity like women’s self-help group (SHG) has always been shown to be less risky. I think, women are much more prudent about risk management and financial management. So, to that extend we don’t have too much history on it and whatever instances we have been, it is less risky.

Banks like Federal Bank are trying to create an eco-system to encourage entrepreneurs especially women entrepreneurs. Firstly, we are creating programs that encourage women entrepreneurs. We have a program called Launchpad wherein we encourage women entrepreneur to come and pitch their ideas. If the product is good, we may fund it and if the product is authentic/ unique we may even partner, which we do very often through Fintech.

Second is from the Fintech prospective wherein we create an API system. Third is through organisational initiatives we offer mentorship on key aspects involved in setting up of startups which is completely non-financial in nature. So, all these three combined I believe we are providing opportunities for young entrepreneurs.

ET: Are we looking much on the micro segments like the SHGs and are we missing out on the technology aspect or some other area that has then potential to scale-up?
SW:
I gave the example of self-help groups for less risk involved. From Fintech prospective, our entire experimentation is around lending products, using social media for credit scoring and using new-age technology to open regular accounts. So, it is less about self-help. We are looking for ideas on how do we get the products for the last market which is unique.

ET: As a banker, do you have enough data to make an informed decision? Do you think there are areas where data can be probed and would something like a public credit registry be helpful?
SW:
There is always that urge to get 100 per cent data. There was no credit registry 10 to 12 years back and now CIBIL is such an integral part of our life that you can’t lend without it. So, yes, a public credit registry will be of a great help, but we need to do a lot of work in that segment. Today, we are not looking for the perfect data and we understand that we cannot get the perfect data particularly for entrepreneurship. What we look for irrespective of the gender is, if the person believes in his/ her idea and is he/she ready to put his/her money behind the idea. Secondly, we see if the person has a strong business plan. If we get both these attributes right, I think we can handhold the person and work with him/her. Guide them if we need to start on a small-scale and structure the product in such a way that it is less risky and focus more on revenue generation.

ET: There are special government schemes that have special provisions for women. Do you think they have worked optimally?
SW:
At a very local level, I believe they have worked. But, at a more global level, I believe there is still work to be done. I think the awareness level is still not very high. People don’t know about the scheme enough, though each bank does a little bit work towards building awareness, but I think there is a lot more to be done in this area.

(The writer contributes for ET Rise)





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