Women investors should note the massive opportunities available to leverage their capital in productive ways at all levels of risk across the spectrum.
Female entrepreneurs and investors in India face a unique set of challenges distinct from those faced by their counterparts in other emerging economies.
Fortunately, nearly three million female small-business owners in the country employing more than 8 million people are working hard to change the societal norms that limit funding, financing, and even many “traditional” investment options for women.
As the population of active female business owners and investors in India increases, the need for additional awareness of investment opportunities grows as well.
When you reach a point where you want to diversify your investments outside your own business, there are many options to consider.
Changing The Conversation
Historically in India, women have struggled to obtain access to traditional financing for business growth and investment purposes.
However, the International Finance Corporation (IFC) revealed in 2014 that “lending to women-owned micro, small, and medium enterprises (MSMEs) as a distinct segment” is likely a far better risk for many financial institutions that had previously been believed.
Since that time, many global financial institutions have begun offering financial and investment services to this sub-segment of the population.
The result has been that the number of female investors actively growing their capital has increased dramatically as women have leveraged the internet to create a wide variety of online businesses from small towns and remote areas with little local opportunity but plenty of virtual investment venues.
Making Bold Investments
While women are known for being risk-averse in many countries, such as the United States, female investors have an unusual appetite for risk.
In fact, they invest nearly twice as much capital in cryptocurrencies as their male counterparts, an amazing statistic given that there are substantially more men than women active in the cryptocurrency sector.
Much cryptocurrency trading revolves around speculative purchases of new currencies not yet widely traded.
Given that most new coins and tokens are never widely accepted on the market, the outcomes for this type of trading are usually not particularly positive although occasionally a currency will deliver a spectacular win.
Note: Cryptocurrency is currently legal in India, but the Reserve Bank of India (RBI) has banned the country’s banks from servicing businesses involved in exchanging or processing digital assets.
Low-Risk, Predictable Options
The level of risk associated with cryptocurrency investments certainly is not for everyone. Female business owners interested in diversifying a portfolio while creating predictable returns may need to look elsewhere.
Fixed deposits (FDs) may represent a better option for most investors, as they offer predictable, locked-in returns as long as the investor does not remove their capital from the FD account earlier than the agreed-upon date.
Many investors like this type of investment, often referred to as a “time deposit” or a “term deposit,” because their returns are not affected by market fluctuations once the capital is invested.
If you are not planning to need your capital for more than a decade, another predictable investment option is the public provident fund (PPF). These accounts may be opened in a bank or post office and earn tax-free interest over a period of 15 years.
PPFs also offer an “escape hatch” of sorts, with the option to withdraw investment capital after six years if necessary. Some funds will also allow you to take a loan on the balance of your PPF account.
An Emerging Market Makes Real Estate Intriguing
Although India is, at present, the fourth-largest world economy, trailing China, the European Union, and the United States, many analysts agree the country’s growing information technology and agricultural sectors could empower the country to move up through the ranks in the near future.
With a gross domestic product (GDP) of $8.8 trillion and a GDP real growth rate of more than 7 per cent, the country is growing in appeal for both native and international investors.
This development is creating an increased interest and appetite from foreign capital for Indian real estate which, in turn, is creating increased real estate investment opportunities for native investors as well as foreign parties buying from abroad.
The market has experienced a degree of volatility in recent years thanks to somewhat opaque lending practices.
However, current market conditions in both the commercial and residential real estate sectors indicate that there is a great deal of opportunity for investors to buy while prices are lower than they have been in recent years, and then convert those properties into performing assets.
Local investors may opt to purchase and hold properties that may appeal to international funds with greater purchasing power for sale at a later date or develop and add value to those properties to the benefit of their own portfolios.
Regardless of your strategy of choice, India’s current real estate market offers a variety of options for both genders today, thanks in large part to several relatively recent amendments to legislation governing property ownership and inheritance rights.
This has made women far more aware of their rights to own and inherit property under the country’s laws.
The World Is Wide Open
A full five years ago, the IFC believed female investors and business owners in India were a very important and powerful population.
In keeping with that, they developed an entire global initiative designed to help financial institutions support this population in its entrepreneurial aims and investment goals.
Female investors should take note of the massive opportunities available to them to leverage their capital in productive ways at all levels of risk across the spectrum.
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You may prefer investing in your own entrepreneurial venture and creating predictable, passive returns in traditional account settings.
Or you may prefer to establish a pattern of growth in an emerging real estate market in a first- or second-tier city or elsewhere. Whatever you decide, there are countless opportunities for the creative and bold investor in India.
Disclaimer: All investments, including real estate, are speculative in nature and involve substantial risk of loss. The ideas and strategies on this website are based on personal opinion. They do not and should not be considered as professional financial investment advice and should never be used without first assessing your own personal and financial situation, or without consulting your professional investment advisor. We advise you to do your due diligence before acting on any information that we publish and do not, in any way, warrant or guarantee the success of any action you take in reliance on our statements or recommendations.
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