In the agenda of entrepreneurship development, institutional finance, undoubtedly, has a key role to play. However, the way this role is performed, is dependent on the objective situation prevailing in each country. Institutional structures are a dominant factor. India has a strong network of public sector banks that play the lead role. Against the regulatory and promotional framework in the country, this paper looks into the role of institutional finance in taking forward the agenda of women entrepreneurship development. The debates on the subject today remain largely partial. On issues relating to flow of institutional credit, there are often arguments on fundamentalist grounds. Such arguments are not likely to help in evolving pragmatic solutions. The situation, as it remains today, is that institutional finance for women entrepreneurship development is, in practice, a divided house. The public financial institutions generally do not find a business case for women entrepreneurship development. Similarly, the financial institutions generally do not find gender as an area of opportunities, but at best, as an area where commitments have been forced upon them.