The Mediating Role of Women Social Entrepreneurs in Strengthening Financial Inclusion through Microfinance

Abstract

This study focusses on the mediating role of women social entrepreneurs in strengthening financial inclusion through microfinance. The research uses a quantitative approach with a descriptive and explanatory design. Primary data is gathered from 150 women micro-entrepreneurs in the SPS Nellore District of Andhra Pradesh. To test the hypothesis, a mediational model was used. Analysis show that women\'s social entrepreneurship acts as a critical pathway through which microfinance access and influences financial inclusion outcomes. The findings reveal that microfinance access has a direct positive effect on financial inclusion.A significant portion of this effect is mediated by engagement of woman in social entrepreneurship. The results show that microfinance becomes more powerful and sustainable tool for enhancing financial resilience, liquidity, and goal-setting in terms of social value creation. The study recommends policy and practice implications for a holistic ecosystem that supports women-led social enterprises to drive inclusive development.

Introduction

Summary

Microfinance plays a vital role in promoting financial inclusion and grassroots economic development in India, particularly empowering women—who make up 99% of the 79 million borrowers. However, the sector faces challenges such as a shift from small-ticket to large loans, which threatens access for the most vulnerable, especially women.

Research Gap

While existing literature acknowledges a link between microfinance and financial inclusion, it often oversimplifies the empowerment process. This study identifies women's social entrepreneurship as a critical missing link that translates financial access into sustainable financial inclusion. It focuses on Andhra Pradesh—a region with a troubled microfinance history—for a more context-specific analysis.

Objectives

1. Examine how microfinance access relates to women's financial inclusion (liquidity, resilience, goal-setting).

2. Explore how social entrepreneurship mediates this relationship.

3. Identify drivers and challenges for women social entrepreneurs.

Context: SPS Nellore District

A largely rural district (71.42%) with a strong fishing economy and service sector. The socio-economic profile sets a relevant context for studying grassroots-level entrepreneurship.

Methodology

• Sample: 150 women micro-entrepreneurs

• Variables:

  • Microfinance Access (loans, savings, microinsurance)

  • Social Entrepreneurship (social value, women’s employment, agency)

  • Financial Inclusion (liquidity, resilience, goals)

• Analysis: Descriptive stats, correlations, and mediation analysis using hierarchical regression.

Key Findings

• Strong positive correlations exist between all key variables.

• Social entrepreneurship significantly mediates the relationship between microfinance and financial inclusion.

• Regression analysis shows:

  • Microfinance → Financial Inclusion (B=0.81, p<0.001)

  • Microfinance → Social Entrepreneurship (B=0.54, p<0.001)

  • Social Entrepreneurship → Financial Inclusion (B=0.79, p<0.001)

  • Mediation reduces direct effect of microfinance, confirming its indirect pathway.

Discussion

The study supports Social Feminist Theory, highlighting how social value creation enables women to leverage microfinance effectively. Rather than just providing credit, empowering women through social enterprise development enhances community impact, agency, and economic stability.

Policy Implications

• Shift focus from access to capacity-building.

• Offer mentorship, training, and customized financial products for women-led social enterprises.

• Recognize the high social return and repayment reliability of this segment.

Conclusion

This study concludes that women\'s social entrepreneurship is significantly mediates the relationship between microfinance access and financial inclusion. The findings show that the full potential of microfinance is unlocked when it is leveraged for a social purpose. By creating enterprises that address community needs, women can move from being passive recipients of aid to active agents of change. Thereby building a more sustainable and resilient form of financial inclusion

References

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Copyright

Copyright © 2025 Dr. P. Beaulah Sucharitha. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.