Government schemes that can help women entrepreneurs in India grow their small businesses

Date : 01/12/2020
Read: 7 mins

Here are the different ways that women entrepreneurs are backed financially by various government schemes

Government schemes that can help women entrepreneurs in India grow their small businesses

India continues to see immensely successful women entrepreneurs; Indra Nooyi, Chanda Kochar, Nisaba Godrej, and Ekta Kapoor being a few of them. Such women encourage other budding women entrepreneurs to turn their dreams into a reality. However, a big part of chasing your dreams of starting a business, no matter how small, is capital. And as a way of encouraging such businesses, the Indian Government offers a financial boost specifically designed for women entrepreneurs. Here are some of the available government schemes for developing women entrepreneurship:

1. Bharatiya Mahila Bank:

Bharatiya Mahila Bank started as a bank that focused on providing finances to underprivileged women who wanted to start their own businesses. It was merged with State Bank of India on March 31st, 2017.

Loans of up to Rs. 20 Crores are sanctioned for manufacturing enterprises
Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), you can avail a collateral-free loan of up to Rs. 1 crore
This loan must be repaid within 7 years
The base rate of interest on this loan is 10.25% to which an additional 2% is added, making the rate of interest 12.25%.

2. Annapurna Scheme

If you want to have your own food catering business and need a financial leg up for all your essential needs such as, basic materials to kitchen utensils, this is a suitable scheme to consider.

Sanctions loans of up to Rs. 50,000
Collateral in the form of assets and a guarantor are needed to avail this scheme
The loan must be repaid within 3 years. (also viewed as 36 instalments)
After the loan is sanctioned, you have a grace period of 1 month before you must start repaying the loan amount
Interest rates vary according to market rates
This is offered by Bharatiya Mahila Bank, as well as State Bank of Mysore

3. Stree Shakti:

Have you been a part of Entrepreneurship Development Programmes (EDPs)? Do you hold major ownership in a small business? This package could be what you need to give your business a boost.

Loans of up to Rs. 50 Lakhs are sanctioned
No security required for the loan.
If your loan amount exceeds Rs. 2 Lakhs, a concession of 0.50% on the rate of interest is offered
The loan must be repaid within a period of 36 months, including one month moratorium period.
You must have 50% ownership in the business for which you want the loan
Offered by State Bank of Mysore

4. Orient Mahila Vikas Yojana Scheme:

This government scheme for woman entrepreneur aims at providing ladies with the capital they require for starting small businesses.

You must have a minimum of 51% of ownership in the business you want a loan for
A concession of 2% on the rate of interest is offered
No guarantor required to avail the loan.
You must repay the loan within 7 years
If your loan amount is below Rs. 10 Lakhs, a collateral is not needed
In case of SSI (Small Scale Industries), up to an amount of Rs. 25 Lakhs, a collateral is not needed.
This scheme was initiated by Oriental Bank of Commerce.

5. Dena Shakti Scheme:

This loan scheme for women is a solution for those who want to make a business out of manufacturing goods, micro-credit, retail stores, and agricultural work.

Loans of up to Rs. 20 Lakhs are sanctioned under the category of education, housing, and retail trading
Under the category of microcredit, loans of up to Rs. 50,000 are offered
Rate of interest charged as per extant guidelines of Dena Bank.
You are offered a concession of 0.25% on the rate of interest.

6. Udyogini Scheme:

The main advantage of the Udyogini Scheme is low-interest rates on business loans, proving beneficial to rural women, and those from under-developed regions.

Loans of up to Rs. 1 Lakh are sanctioned, given the woman availing the loan is aged between 18 and 45
Additionally, her family’s yearly income should be Rs. 45,000 or less
No income limit exists for widowed, destitute or disabled women
For widowed, destitute or disabled women and women belonging to SC/ST category, a subsidy of 30% of the loan, or Rs. 10,000 (whichever is lower) is provided
For women belonging to the general category, a subsidy of 20% of the loan or Rs. 7,500, whichever is lower, is provided
Punjab & Sind Bank started promoting this scheme, and many other banks, including Karnataka State Women’s Development Corporation (KSWDC) offer this loan today.

7. Cent Kalyani Scheme:

This loan scheme is ideal for women who manage SMEs or is involved in agricultural work or engages in retail trading.

Loans of up to Rs. 100 Lakhs are sanctioned
No collateral or guarantors are required
Another benefit of this scheme is that there is no processing fee
This was launched and is offered by Central Bank of India
Interest rates vary according to market rates

8. Mahila Udyam Nidhi Scheme:

Launched and offered by Punjab National Bank, this loan aims to help women set-up new projects. It mainly targets the small-scale sector and promotes upgrading and modernisation of existing projects.

Loans of up to Rs. 10 Lakhs are sanctioned
These must be repaid within 10 years, and includes a moratorium period of maximum 5 years
Interest rates vary according to market rates

9. Mudra Yojana Scheme for Women:

This scheme aims at providing financial support to women entrepreneurs in India who want to open a day-care centre, beauty salon or a similar small venture. Additionally, the scheme is especially beneficial to a group of women interested in opening a business.

Loans starting from Rs. 50,000 up to Rs. 50 Lakhs are sanctioned
No collateral or guarantors are required if the loan amount is less than Rs. 10 Lakhs
Women must apply for a loan under the Shishu, Kishor or Tarun plans

- Shishu Plan: For businesses in the initial stages. A loan of up to Rs. 50,000 is sanctioned

- Kishor Plan: For well-established businesses. Loans in the range of Rs. 50,000 to Rs. 5 Lakhs are sanctioned

- Tarun Plan: For expanding a business.Loans of up to Rs. 50 lakhs are sanctioned

The loans can not be availed directly through MUDRA, but from banks and NBFCs instead. Individuals must apply online on the Udyamimitra portal.