The Indian government is making continuous and conscious efforts in uplifting the country’s economy. In fact, India is expected to take place 3 in the economy across the globe and the projected GDP is USD 13.7 bn. This is expected to come true by 2030. So, what will make this happen? The initiative of welcoming more entrepreneurs across the country. Especially, there is a special focus on Women Entrepreneurs. It is always been a struggle to get ladies out of the house to several differences that exist in India. Therefore the Indian government has taken steps to provide Business loans for Female Empowerment.
Before we briefly see the different business loans offered to women entrepreneur let us explain to you with a few important statistics about female employment and the need for business loans.
- There were not more than 2% of funding utilized by women entrepreneurs in India till the year 2017.
- Out of 58.5 million Indian entrepreneurs, only 14% of women’s population contributes.
- 45 million people are employed in a women startup business.
- A study conducted by McKinsey Global Institute says that the scope for an increase in India’s GDP is in the hands of women entrepreneurs. If they can start a business on par with men, then the country’s economy will be fairly increased (USD 2.9 trillion).
These are the triggering points for the introduction of several Business Loans In India. It is important to empower women to break the shell and get them out. They will realize the potential to feel confident. Now, we can analyze the various business loans offered to empower women entrepreneur.
Per the latest budget in 2019, there are nine business loan schemes to empower women entrepreneurs and they are listed in the increasing order of the loan amount.
- Scheme Name – Annapurna; Nature of business – Food business; Loan Amount – 50000
This loan is mainly designed to help a female with or without education. Cooking is the core strength of every Indian woman and this scheme will allow that to be utilized to generate profit. Women can improve their lifestyle, provide employment to others and enhance the economy of the country. The loan amount is INR 50000 and can be availed to buy utensils and equipment required for cooking. A business asset is pledged as security. The loan seeker can repay the loan in 36 installments on a monthly basis and hence take time till 3 years to complete the loan repayment tenure. The first month EMI is not charged and interest rate can be fixed by the lender comparing the market rate and RBI norms.
Who offers this scheme? State bank of Mysore and Bharatiya Mahila Bank.
- Scheme Name – Udyogini; Nature of Business – Agriculture, or Retail: Loan Amount – 100000
The udyogini scheme is offered to women between ages 18 and 45 and they can start any small business with a loan amount of INR one lakh. The family income of the loan seeker should not be more than INR 45000. Women who cannot show any income but are disabled, destitute, widow or SC/ST then they can avail up to 10000 to start a small business.
- Scheme Name – TREAD; Nature of Business – Small business; Loan Amount – 500000
TREAD – Trade Related Entrepreneurship Assistance and Development. This scheme is specially designed to offer a 30% subsidy on the project cost for women business owners. Also, there is a facility to avail of training offered by government recognized institutes to set up a business.
- Scheme Name – Mahila Udyam Nidhi; Nature of Business – Small scale venture; Loan Amount – 10 lakhs
SIDBI (Small Industries Development Bank of India) proposed this scheme and the repayment period is very flexible and one can take a maximum of 10 years to repay. This includes a moratorium period of 5 years and can not only be used to start a business but can utilize the loan amount to expand the existing project. Up to 10 lakhs can be taken as loan and interest rate varies with the market rate. Purchase of vehicles is allowed in this scheme for business purposes. A soft loan of 25% of the project cost is offered with a service charge of 1% per annum under this scheme.
- Scheme Name – Dena Shakti; Nature of Business – Agriculture, Retail store, micro-credits. Loan Amount – 20 Lakhs
Women entrepreneurs can set up a retail store or other similar businesses. Microcredit business owners can avail 50000 and also there is a concession rate of 0.25% on the interest rates. A maximum of 20 lakhs can be availed which can be repaid within 7 years and there is a 0.5% processing fee on the loan amount. It is a combo loan for working capital and term loan.
- Scheme Name – Stree Shakti Package; Nature of Business – Small business; Loan Amount – 50000 to 25 lakhs
State bank of India introduced this scheme to enable women entrepreneur to start a small business. Women professionals including Chartered Accountants and Doctors can avail of this loan to set up an office. The loan amount varies as listed below
- 50000 to 2 Lakhs – Retail traders and Business enterprises
- 50000 to 25 lakhs – Professionals and SSI
No collateral required up to 10 lakhs. Women loan seekers can avail a concession in the interest rate of 0.05 percent if the loan amount is exceeding 2 lakhs.
- Scheme Name – Mudra Yojana; Nature of Business – Parlor, Tuition center, tailoring unit; Loan Amount – 50000 to 50 lakhs
A small business unit like a beauty salon, tailoring or tuition center can be established with this loan. The partnership is allowed in this scheme and security is required for loan amount above 10 lakhs. Different plans under this scheme include
- Up to 50000 – Shishu
- 50000 to 5 Lacs – Kishor
- 5 lacs to 10 lacs – Tarun
- Scheme Name – Cent Kalyani; Nature of Business – Agriculture and retail trading; Loan Amount – 1 crore
The central bank of India launched this scheme and hence named Cent Kalyani. The interest rate is flexible and no collateral required. Women business owners can set up agricultural, garment business, handicrafts, etc. The repayment period can be extended up to 7 years.
- Scheme Name – Bhartiya Mahila Bank Business Loan; Nature of Business – Manufacturing Business; Loan Amount – 20 crores
This scheme allows women business owners to set up manufacturing plants and the loan amount is as high as 20 crores. However, there is no collateral required till 1 crore and beyond that one has to pledge assets equivalent to the amount requested of loan. One can take a maximum of seven years to repay this loan. Additionally, a 0.25% concession is offered on the interest rate. The other plans under this scheme include
- Shringaar – Parlor business
- Parvarish – Daycare facility to take care of kids
- Annapurna – Food business
Summary
| Scheme Name | Loan Amount in Lakhs |
| Annapurna | 0.5 |
| Udyogini | 1 |
| TREAD | 5 |
| Mahila Udyam Nidhi | 10 |
| Dena Shakti | 20 |
| Stree Shakti Package | 25 |
| Mudra Yojana | 50 |
| Cent Kalyani | 100 |
| Bhartiya Mahila Bank Business Loan | 2000 |
Final inputs
You will now be glad to look at several schemes launched by nationalized banks for encouraging women entrepreneurs.
Further, at FlexiLoans we will assist you with funding as per RBI norms but with several beneficial features. Also, we will guide you to make the best use of finance to become a successful industrialist.
