Historically, women have been barred from pursuing their passion because it was believed that their one true calling should be to cook and clean. Long gone are those days, however, due to its trickle-down effects and the lack of adequate resources, women in some parts of the world are struggling to give wings to their dreams. Jacinda Ardern, Serena Williams, Indra Nooyi, Priyanka Chopra, and Leena Nair are some brilliant women who have left a mark in this world with their expertise in their fields. However, the journey from a ‘naari’ to an ‘entrepre-naari’ requires a robust funding plan.
A snapshot of government loan schemes for women entrepreneurs
The Indian government has stepped up to help women, who have revolutionary ideas but need monetary assistance to set up their ventures. Here’s a quick list of the best government loan schemes in India.
- Pradhan Mantri Mudra Yojana Scheme
The Micro Units Development and Refinance Agency (MUDRA) Loan Scheme or the Pradhan Mantri Mudra Yojana scheme is an initiative to support individuals, startups, business owners, self-employed professionals, and entrepreneurs, engaged in trading, manufacturing, or servicing to meet their day-to-day operating costs. It is ideal for women who want to start a beauty parlor, open a tuition center, or open a tailoring shop.
The MUDRA loan scheme offers collateral-free loans through banks and NBFCs with repayment tenures ranging from 1 year to 5 years. The loan applicant may also choose flexible EMI options to pay off the loan amount. Any person from a minority background can also avail of the Mudra loans at lower interest rates.
The Mudra Yojana scheme offers around INR 50,000 for startups and businesses (under the Shishu loan scheme), INR 50,001 to INR 5,00,000 to purchase raw materials and industrial equipment (under the Kishor loan scheme), and INR 5,00,001 to INR 10,00,000 for established enterprises to expand their business (under the Tarun scheme). To further help micro businesses, the interest rate on Shishu Mudra loans has been reduced by 2% for women.
- Annapurna Loan Scheme
Under the Annapurna loan scheme launched by the State Bank of Mysore, the Indian government offers monetary aid of INR 50,000 to help them set up food catering businesses. Women can use this amount to buy cooking ingredients, kitchen accessories, and large cooking utensils. The loan applicant does not have to pay EMI for the first month and the entire amount must be repaid in 36 installments. Women, who have taken a career break, or are juggling multiple responsibilities, can also comfortably slip into the role of a home delivery business owner.
- Pradhan Mantri Rozgar Yojana Scheme
One of the various loan schemes issued for the betterment of women in business, the PMRY scheme is aimed at helping the educated youth of our country to learn in-demand skills and begin their personal business projects. The purpose behind the PMRY scheme is also to help individuals generate employment opportunities for others. You can avail of up to INR 1 lakh, which you can pay off within 3 to 7 years.
- Dena Shakti Loan Scheme
Women entrepreneurs with franchises in agriculture, micro-credit, retail stores, manufacturing, or small businesses can avail of up to INR 20 crores with a reduction of 0.25% on the interest rate. Under the micro-credit category, women can also get INR 50,000 to fund their equipment and accessories.
- Stree Shakti Yojana Scheme
One has to be a part of the Entrepreneurship Development Programme (EDP) organized by their respective states to avail of the Stree Shakti Yojana scheme. Under this scheme, you can avail of 0.05% interest rates on loans of more than INR 2 lakhs. It is applicable to those women, who have maximum ownership in their venture.
- Bharatiya Mahila Bank Business Loan Scheme
The sole purpose of the Bharatiya Mahila bank is to enable women from struggling financial backgrounds to realize their dreams of setting up a business. If your idea is based on manufacturing items from raw materials, you can take up to INR 20 crores without any collateral. You can repay the loan amount at an interest rate of 12.5% for around 7 years from the time of sanction.
The BMB Shringaar loan does not require you to submit any collateral. You can use the loan amount to meet daily business expenses. The Parvarish BMB scheme is for women, who want to set up day-care centers. Since it falls under the category of Credit Guarantee Fund Trust for Micro and Small Scale Enterprises, you can avail of up to INR 1 crores without any collateral.
- Udyogini Scheme
The Udyogini scheme launched by the Indian government offers the lowest possible interest rates for women, whose family’s net income is less than INR 45,000. If the woman is a widow or destitute, the income limit is waived. If a woman is from a minority background (SC/ST) as well as a widow or destitute, they further get a subsidy of INR 10,000 or 30% of the approved loan amount. If they fall under the General category, they are eligible for a subsidy of INR 7500 or 20% of the loan amount. Women between 18 to 45 years of age can easily avail of up to INR 1 lakh.
- Synd Mahila Shakti Scheme
The Syndicate bank has issued this scheme with a vision to help pioneering women start-up owners and founders facilitate their operating costs through credit facilities. They can use the loan amount to hire more employees or buy new equipment. Under this scheme, you can avail of up to INR 5 crores at minimal interest rates. You do not have to submit collaterals up to INR 10 lakhs. If you are availing of more than INR 10 lakhs, you can get it with a 0.25% interest rate. You do not have to pay any processing fees.
- Mahila Udyam Nidhi Yojana Scheme
This scheme is offered by the Punjab National bank and the Small Industries Development Bank of India (SIDBI). It is geared towards helping women entrepreneurs set up their businesses by offering up to INR 10 lakhs, which they can repay over the course of 10 years. The interest rates depend on market rates, however, the scheme will factor in concessions to help womenfolk bring their dreams to reality.
- Cent Kalyani Scheme
All kinds of self-employed women, existing entrepreneurs, and new founders can avail of this loan scheme. Small enterprises specializing in agriculture, retail, and other cottage industries can also apply for the Cent Kalyani scheme. You have to repay the loan amount within 7 years. However, you need not provide any collateral to take this loan.
- Orient Mahila Vikas Yojana Scheme
If you are a woman and have almost 51% shares in your business, you can avail of this loan scheme issued by the Oriental Bank of Commerce. A 2% relaxation rate is approved for this loan. You must repay the loan amount in 7 years. If you are applying for a loan of less than INR 10 lakhs, you do not have to submit collateral. If your business falls under the category of Small Scale Industries, a loan amount as extensive as INR 25 lakhs will be approved without any collateral under the Mahila Vikas Yojana scheme.
The government is doing its bit to encourage women to go forward with their business plans and achieve financial independence. Gone are the days when a woman’s only career option was to complete her chores as a housewife. Now, women have the opportunities and ideas to make a mark of their own.
ApnaPaisa is doing its utmost to help women in India become more financially literate and take control of their lives. They publish blogs with money management tips, best credit and debit card practices, and tips to avoid debt. They also offer loans with competitive interest rates and minimal paperwork. You can reach out to their financial consultants or DSA agents to help you through the loan application process.