Skilling and Supporting Women Entrepreneurs in Rural Tamil Nadu

Highlights

• Nithya, a mother from rural Tamil Nadu, transformed her life by joining a masonry training program offered by a Community Skills School. This initiative, part of the Vazhndhu Kattuvom program supported by the World Bank, enabled her to start a successful masonry enterprise, significantly improving her family's income and providing employment to other women in her village
• The Tamil Nadu Rural Transformation Project is helping to address the financial challenges faced by aspirational women entrepreneurs. Through the Matching Grants Program, women like Janaki received essential support to secure loans and expand their businesses. This Program has facilitated loans worth INR 267 crore ($31.9 million) for 8,400 women-led enterprises since 2022.
• The Project has created over 100,000 enterprises and nearly 53,000 jobs, promoting inclusive economic growth in rural areas. Its success has inspired other states to adopt similar models, aiming to foster long-term prosperity and uplift communities by prioritizing women-led enterprises.

Ever since she became a mother, 25-year-old Nithya wanted to contribute to the family income to provide a better life for her two young children. But opportunities for women appeared limited in her village, situated near a picturesque centuries-old temple in Tamil Nadu’s Tiruchirapalli district. “I wanted to work but couldn’t move to a city and leave my children behind,” she explained.

Today, Nithya is the chairperson of a thriving masonry enterprise in the heart of her village home. The turning point came when Nithya’s self-help group informed her about a masonry training program offered by a new Community Skills School established nearby. She enrolled in a 20-day training course, where she met three other women who, like her, were eager to build a better future for themselves. Together, they formed a partnership and soon bagged their first major order: creating 600 sign boards for the local panchayat (village council) worth INR 15 lakh ($18,300).

Today, Nithya and her business partners run a full-fledged construction enterprise, each earning about INR 1,000 ($ 12.50) a day. They have also employed three other women from their village. "I never imagined I’d earn so soon after my training," recalled Nithya proudly.

Nithya’s story is just one example of the transformation taking place across Tamil Nadu through the efforts of the state government’s Vazhndhu Kattuvom -VKP (Let’s Live and Show) program. The program, supported by the World Bank’s Tamil Nadu Rural Transformation Project, sought to create jobs in the rural areas by building people’s skills, promoting entrepreneurship, and making it easier for small businesses to access finance.

Since 2019, the 2,500 Community Skills Schools established by the project have helped train more than 50,000 young people in some 75 trades; 65 percent of them were women. These schools offer affordable, accessible vocational training specifically tailored to women’s needs, as they often face barriers in formal employment. What sets these schools apart is that they are run by successful local businesses, where the business owners and community experts serve as trainers, ensuring that the training is practical and relevant.

Many graduates of these skills programs have gone on to launch businesses of their own. Since the project began, some 28,700 new enterprises have been started across the state. In addition, more than 11,600 trainees have found employment in local enterprises, providing sustainable livelihoods to rural dwellers and strengthening the rural economy.

Interestingly, many women have taken up traditionally male dominated professions, such as making LED bulbs for sale in local markets. “Instead of always being on the lookout for a job, I can now earn from home” said Banu Priya, a one-time farm laborer who used to find work only sporadically. “I now have a steady income,” she said, “and the job is easier too.”

Supporting Budding Women Entrepreneurs

Even so, skill development is only part of the equation. While many women like Nithya have the skills, they often find it difficult to secure the capital needed to start or grow a business. In fact a 2022 study revealed that while some 20 percent of India’s nano, micro, small, and medium enterprises (MSMEs) are owned by women, the unmet credit demand from women-led enterprises amounted to a staggering $11.4 billion.

Janaki, for instance, wanted to expand her small hardware store near her home in Sivagangai district’s Kollangudi village. She had set up her store two years earlier, using her hard-earned savings, pledging her gold jewellery, and taking a loan from her self-help group. Now, with the demand for electrical goods soaring, she saw the opportunity to expand her business but lacked the collateral or the know-how to get a bank loan.

This was where the project stepped in. Its Matching Grants Program enabled Janaki to get a loan from a financial institution by providing her with a 30 percent grant which she could use as collateral, significantly reducing the risk for lenders.

It also connected her to Rozi, a community facilitator, who assessed her business potential and brought her to the nearby One Stop Facility Center - Mathi Siragugal Thozhil Mayyam – where qualified professionals helped her finalize her business plans, complete the necessary documentation for a bank loan, and develop a marketing strategy.

“The support from Rozi and the OSF was invaluable,” said Janaki. “They not only helped me get the loan but also guided me in adopting digital payment systems and better bookkeeping practices. My revenue has increased by 40 percent, and I’ve even hired another woman to help with the growing demand. I finally earn enough to fulfil my long-cherished dream of sending my children to a better school.”

Since 2022, the Matching Grants Program has enabled 8,400 women-led enterprises across the state to secure loans worth INR 267 crore ($31.9 million).

Promoting Women Owned Enterprises, Creating Employment Opportunities

Altogether, the project has supported the creation of over 100,000 enterprises, generating nearly 53,000 jobs.

“Our goal is not only to alleviate poverty but to foster enduring prosperity in rural areas,” says Ms. S. Divadharshini, the project’s Chief Executive Officer. “By prioritizing women-led enterprises, we ensure that the benefits of economic growth are inclusive and far-reaching.”

The project’s wide-ranging impacts have led the Government of Tamil Nadu to consider scaling up the model statewide using government resources. States such as Bihar and Sikkim have also recognized the transformative power of these initiatives and sent teams to Tamil Nadu to learn best practices.

“The project is not just about skill development or providing financial assistance. It’s about driving lasting economic change that will uplift communities for generations to come through jobs” added the World Bank’s Samik Sundar Das, who led the project.

By providing rural women like Nithya and Janaki with the tools they need to succeed, the project is changing lives, unlocking the potential of entire communities, and creating a more inclusive and prosperous future for Tamil Nadu.

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Hear what these women entrepreneurs have to say: