Role of Mahila Cooperative Banks in Promoting Women Entrepreneurs in Bengaluru: Access to Credit, Financial Inclusion and Business Sustainability

Abstract

Women enterprises create jobs, add to household income and give women a stronger voice in financial decisions, yet many women entrepreneurs still struggle to obtain affordable credit. Collateral requirements, limited financial literacy and uneven institutional support are often considered as obstacles, and they are especially serious for micro and small enterprises that work with limited capital. This study examines how women-oriented cooperative banking, referred to here as Mahila Cooperative Banks, can support women entrepreneurs in Bengaluru, with particular attention to access to credit, financial inclusion and business sustainability. The study follows a descriptive and analytical design. It combines published statistics from the Ministry of MSME, NABARD and the Reserve Bank of India with a structured questionnaire survey of 100 women entrepreneurs who has availed financial assistance from Mahila Cooperative Banks operating in Bengaluru. Official records show 1,619,612 women-owned MSMEs registered in Karnataka on the Udyam platforms between July 2020 and November 2024. In the survey, 65% of respondents had applied for a business loan and 48% had a loan approved, which is 73.8% of applicants. Collateral was the most common difficulty, reported by 64.6% of applicants, and 53.8% found the loan terms were difficult to follow. Across the entire sample, 68% reported higher monthly sales, 88% said their business was still operating, 75% reported repaying on time and 72% said they controlled business funds, although 38% described the cost of borrowing as high. The results suggest that collateral requirements and weak understanding of loan terms, rather than unwillingness to borrow, are the main barriers to credit. The study recommends loans with minimal collateral requirements, simpler documentation, practical financial-literacy programmes and regular monitoring of gender-disaggregated lending outcomes. The findings are descriptive.