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 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 than 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 in India 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.
Cryptocurrency exchange BuyUCoin recently revealed that although only about one in every 10 cryptocurrency investors is female in areas like Delhi and about one in 20 is female in other cities the exchange analysts studied, “Indian women spend close to more than Rs.1,400,000” on cryptocurrencies in their portfolios while Indian men usually invest only about half that amount.
Cryptocurrency investing is certainly not for the faint of heart. While it may be managed in a relatively traditional forex format, in which a currency is purchased, exchanged at beneficial rates for other international currencies, then cashed in at some point in the future for profit, cryptocurrencies are far less predictable than other currencies.
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.
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 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.
Although the market has experienced a degree of volatility in recent years thanks to somewhat opaque lending practices, current market conditions in both the commercial and residential real estate sectors indicate 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 to 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, which have 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 such an important and powerful population 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.
Learn how to invest in the stockmarkets by opening a DEMAT account, in case you don’t have one. Complete the e-KYC process and you are ready. Get equity and mutual fund investment advice for online trading and benefit from expert advice on how to do online share market trading.
Whether you prefer investing in your own entrepreneurial venture, creating predictable, passive returns in traditional account settings, or establishing a pattern of growth in an emerging real estate market in a first- or second-tier city or elsewhere, there are countless opportunities for the creative and bold investor.
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