While the start-up ecosystem in India is growing, the rate of emerging women entrepreneurs is still below average. To encourage the growth of women entrepreneurship, many initiatives that will provide loans for women have been introduced by the government and independent financial firms. Let’s take a look at some of the business funding options for women.
1. Government Loans
Prime Minister Rozgar Yojana for women extends a loan of up to Rs 5 Lac to unemployed young women, uneducated homemakers, and students between the age of 18 to 45 to start a business. It is a great source of funding for women as they have longer repayment periods and a lower rate of interest.
Pradhan Mantri Mudra Yojana has three different loan options- Shishu, Kishor, and Tarun for start-ups as well as existing business expansion one of the lowest interest rates in the country,. Women entrepreneurs can get a loan of up to Rs. 50,000 for starting a small-scale business under the Shishu loan option. For existing businesses Kishor and Tarun options allow a female entrepreneur to borrow up to Rs. 10 lakhs for a tenure of up to 5 years
Women Enterprise Program or Mahila Udhyami Yojana offers women entrepreneurs an interest discount of up to 0.25% on their business loans. It also has low interest rate and eligibility requirements and flexible tenure of up to 5 years
2.Government Sector Bank Loans
- Stree Shakti Package from SBI: State Bank of India offers this Mortgage Free loan with an interest rate of 11.20% onwards (p.a.) and repayment tenure up to 36 months, including 1 month moratorium period for women who own 51% or more in the enterprise.
- Cent Kalyani from CBI: Central Bank of India offers this scheme for women entrepreneurs who are into rural and cottage industries, MSMEs, entrepreneurs, and women working in farming, retailing, and government-backed firms. you can avail under this scheme is up to Rs. 100 Lakh. to meet day-to-day requirements, such as the purchase of plant & machinery/equipment, etc. and working capital expenditure.
- Shringaar and Annapurna from Bhartiya Mahila Bank: BMB Shringaar (Loan for Beauty Parlour, Saloon or Spa) and BMB Annapurna (Loan for Food Catering) are both Collateral Free loans to be covered under CGTMSE. The eligibility age is 20-60 years with repayment tenure of 7 years and 18-60 years with repayment tenure of 3 years respectively.
- Shakti Scheme from BoB: The Shakti Scheme from Dena Bank supports women entrepreneurs who are into agriculture & allied activities, retail trade, micro credit, education, housing as well as enterprises in the direct/indirect finance, manufacturing and services sectors. It offers up to Rs. 20 Lakhs for retail trade, education and housing and Rs. 50,000 under micro credit schemes with0.25% below base rates for women applicants who are majority stake holders in the company.
- Mahila Udyam Nidhi Scheme from PNB: Punjab National Bank offers this scheme for women and has different plans for day-care centres, beauty parlours, purchase of two-wheelers, cars, auto-rickshaws, etc. You can avail up to 10L with repayment tenure of 3-5 years under this scheme. ROI varies based on the market rate.
- KBL Mahila Udyog Loan from Karnataka Bank: Karnataka bank offers this scheme exclusively to women holding minimum 51% of shareholding and controlling stake in the firm or company. The maximum loan amount offered is Rs. 10 Lakhs and the maximum repayment tenure is up to 10 years.
- Orient Mahila Vikas Yojana Scheme: Oriental Bank of Commerce provides it to women holding at least 51% share in the organisation. No collateral required up to Rs. 25 lakhs and maximum tenure is 7 years. The concession on the rate of interest is 2%.
3.Commercial Business Loan
- With a commercial business loan, you can borrow as much as Rs. 50 lakhs for tenure of up to 3-5 years. These loans are generally ideal for medium-scale businesses wanting to expand their operations. You will also be required to submit your current account statement of at least one year to the lender to ascertain that you are running a profit-making business. if you do have assets like commercial property which you can pledge, the loan amount can be increased further.
4.Small Business Finance
- Some financial institutions now offer many different types of small business or SME loans. Small to medium-scale female entrepreneurs funding can opt for LOC or Line of Credit where the eligibility of the applicant is used by the lender for determining their maximum LOC amount. You can borrow loans of up to 50 Lakhs or more. While repaying the loan, you will only be required to pay interest on the amount you actually used and not on the entire credit limit. Secured and unsecured loans are available.