Loan Schemes for Women Entrepreneurs in India

Table of Contents

Women Entrepreneurs can be seen everywhere in the startup-up ecosystem of India. Women too are seen leaving their high-profile jobs as well as some stepping out of the four walls of their homes and joining the pool of Entrepreneurship in India. The major factor to jump-start the entrepreneurial journey is capital and various banks offer specialized loans for women entrepreneurs that have a slightly different and more flexible set of terms and conditions pertaining to collateral security, interest rates, etc.

Being a small business owner means contending with numerous financial challenges.  Besides the obvious expenses of procuring goods, securing space, hiring workers, and paying taxes, women-owned businesses must also think about license and permit costs, utility bills, services like phone and Internet, repairs and maintenance, obtaining equipment and much more.  Even the most successful small businesses can find themselves in need of extra funds from time to time, which is why it’s important for female owners to consider how different business loans for women can serve their needs.

Choosing the right loan can be just as important as receiving money in the first place, as factors like repayment options and loan costs will directly impact a business’s bottom line.  For women entrepreneurs who want to transform their vision for business success into a reality, working with a lender who understands their needs is essential.

Features and Benefits

Flexible Repayment Tenor

Divide your business investments into EMI ranging from 12 months to 96 months.

No Collateral Required

No guarantors or collateral required, to make the application process fast and easy.

Approval within 24 hours

Business funding for women is made easy with a quick online application process and loan approval in 24 hours.

Flexi Loan facility

Withdraw funds as many times as you need and pay interest only on the amount withdrawn. Repay when you want, to suit your cash flow, at no extra cost. Flexi loan facility helps you reduce your EMI by up to 45%.

Minimal Documentation

Simple eligibility criteria on business financing for women with only 2 documents needed to apply for the loan.

Schemes for Women Entrepreneurs in India

Orient Mahila Vikas Yojana Scheme

Provided by Oriental Bank of Commerce, the scheme entails to meet the credit needs of Women Entrepreneurs. In order to be eligible for the scheme, a women has to hold a 51 per cent share capital individually or jointly in a proprietary concern. The scheme which provides a concession on the interest rate of up to 2 percent doesn’t requires collateral security for loans of 10 lakhs up to 25 lakhs. The period of repayment for the loans provided under the scheme is 7 years.

Annapurna Scheme

Offered by State Bank of Mysore, the scheme provides loans to women entrepreneurs who are working towards setting up small businesses in the food catering industry. The maximum amount of money that is granted under the scheme is Rs.50,000. The amount granted can be utilised to fulfill the working capital requirements of the business like buying utensils and other tools and equipment.

Cent Kalyani Scheme

Conceived and offered by Central Bank of India, the scheme aims to encourage Women Entrepreneurs to start new project or expand/modernise their existing unit. The scheme is targeted at new as well as existing women entrepreneurs for her Micro/Small enterprise ( as defined under MSME Act- 2006) .i.e engaged in manufacturing and service activity for eg. Handloom weaving Handicraft, Food-Processing, Garment making etc. etc. Professionals & Self-employed women Doctors, Chartered Accountants, and Engineers or trained in Art or Craft etc. Health /Beauty clinics/Dieticians/Fashion Designing Beauty Parlors. Small Business-Small lunch/canteen, mobile restaurant, circulating library/ tailoring /Day Creaches for children ,Tailoring, Typing / STD/ Zerox booth etc., Transport Operators- Three wheeler /Four wheeler. Sectors such as Retail Trade, Education and training Institute and Self Help Groups are not eligible for the scheme.

The maximum amount that can be granted under the scheme is Rs. 100 lakhs. The best part of the scheme is, that it doesn’t requires any collateral security or guarantor and charges no processing fees whatsoever.

Mudra Yojana Scheme for Women

This scheme has been launched by the Govt. of India for individual women wanting to start small new enterprises and businesses like beauty parlors, tailoring units, tuition centres, etc. as well as a group of women wanting to start a venture together. The loan doesn’t require any collateral security and can be availed as per 3 schemes are

i. Shishu – loan amount is limited to ₹50,000 and can be availed by those businesses that are in their initial stages.
ii. Kishor – loan amount ranges between ₹50,000 and ₹5 lakhs and can be availed by those who have a well-established enterprise.
iii. Tarun – loan amount is ₹10 lakhs and can be availed by those businesses that are well established but require further funds for the purpose of expansion
If the loan is granted, a Mudra card will be given to you which functions the same way as a credit card however the funds available are limited to 10% of the loan amount granted to you.

Mahila Udyam Nidhi Scheme

This scheme is launched by Punjab National Bank and aims at supporting the women entrepreneurs involved in the small scale industries by granting them soft loans that can be repaid over a period of 10 years. Under this scheme there are different plans for beauty parlors, day care centres, purchase of auto rickshaws, two-wheelers, cars, etc. the maximum amount granted under this scheme is ₹10 lakhs and the interest depends upon the market rates.

Udyogini Scheme

Sanctioned by the Government of Karnataka in the year 1997-98, the scheme assists women in gaining self-reliance through self-employment, especially in the trade and service sector. Offered by Punjab and Sind Bank, the scheme empowers women by providing them loans.

Under this scheme, the maximum unit cost is Rs.1,00,000/-. Age limit for the beneficiary is 18-45 years and family income limit to avail this benefit is Rs.40,000/- per annum for all women including those belonging to SC/ST. The scheme has really made a difference in preventing women entrepreneurs from private borrowing at higher rates of interest.

Dena Shakti Scheme

Offered by Dena Bank, the scheme provides financing to Women Entrepreneurs working in the fields of agriculture, manufacturing, micro-credit, retail stores, or small enterprises. The maximum ceiling limits that can be considered for financing to women beneficiaries under this scheme will be as per the directives of RBI stipulated for various sectors under priority sector such as loans up to Rs 20.00 lakhs under retail trade, Rs 20 lakhs under education and housing and Rs 50000/- under micro credit as well as Bank’s specific schemes circulated to branches /offices from time to time.

Annapurna Scheme

This scheme is offered by the State Bank of Mysore for those women entrepreneurs who are setting up food catering industry in order to sell packed meals, snacks, etc. The amount granted as a loan under this scheme can be used to fulfill the working capital needs of the business like buying utensils and other kitchen tools and equipment.

Under this loan, a guarantor is required along with the assets of the business being pledged as collateral security. Further, the maximum amount of money that is granted is ₹50,000 which has to re-pay in monthly installments for 36 months, however, after the loan is sanctioned, the lender doesn’t have to pay the EMI for the first month. The interest rate is determined depending upon the market rate.

Stree Shakti Package

The Stree Shakti Package is a unique scheme run by the State Bank of India (SBI), which aims to support entrepreneurship among women by providing them certain concessions like no security requirement for loans up to Rs 5 lakh in case of tiny sector units or lowering of interest rate by 0.5 percent in case the loan exceeds Rs 2 lakh. In order to qualify for the scheme, an enterprise should have more than 50 percent of its share capital owned by women.

Related Blogs:

Best Investment options for Women in their 30s

In India, there are several investment options and plans that offer long-term benefits to women investors. However, one must know how and where to invest their hard-earned money.

7 Financial mistakes every Woman should avoid

There is one aspect where Indian women still need to catch-up it’s managing their finance independently. There is still a dependency, especially among Indian women, on their father or partner to manage their finance, mainly due to the failure to break away from the age old traditions of men taking all the financial decisions.

Financial Advice for Women

Indian women have started earning decent money and thus are becoming financially independent. However, financial decisions are still being taken mostly by their fathers or husbands. 

Loan sizes higher when Women Borrow

A woman’s best protection is a little money of her own. Women in India have been taking huge strides in breaking through the glass ceiling in many industries. 

Tips for Women to save more

Be it single women, married or divorced, there are ways to overcome hurdles and become financially independent. Some of the challenges may be it in dealing with the struggle of saving and investing, tackling financial illiteracy, balancing the needs and wants of parents and children, or overcoming resistance in marriage.

Woman’s Guide to manage Finances in 2021

The higher loan amount when a woman applies could indicate it’s a household with two incomes, unlike when a male applies, where he could be the only breadwinner. 

Business Loans for Women in 2021 – Best Bank Business Loans including SBI

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.