9 Business Loan Schemes for Women Entrepreneurs

January 13, 2022

Women are evolving in the field of entrepreneurship. In the modern era, about 15% of entrepreneurs are women. Moreover, the number of women entrepreneurs is growing gradually worldwide. More and more women are opting for entrepreneurship than a stable 9 to 5 job that provides them complete security. 

As women entrepreneurs, they get the freedom to choose their conditions and charge what they are worthy of. Entrepreneurship gives the women freedom of zero compromises between work-life balance. Hence, they can have it all. Hence, women are moving towards entrepreneurship. They are choosing an independent way of life rather than going for the traditional career path. In India, there are over 8.05 million women entrepreneurs which is about 14% of the total business industry of India. 

To drive this growing change, the government and public institutions have launched a few schemes for women entrepreneurs. Under these schemes, the women entrepreneurs will be able to grow with their business and take it to another level. These schemes for women entrepreneurs have lucrative offers that encourage them to take a step forward and make the loan procedure easy for them. Under these schemes, there are certain rules and requirements that need to be followed. The women entrepreneurs should check these requirements beforehand. However, let’s discuss the schemes available for women entrepreneurs in detail.

Mudra Yojana

It is one of those government schemes for women entrepreneurs which is aimed to improve the stature of women in society. Under this government scheme, women entrepreneurs will receive loans in a form of support for helping them to be financially independent and self-contained. After the loan has been approved, the applicant will receive a Mudra card, which is similar to the credit card in respect to looking and working. It will have a withdrawal limit of 10% of the loan amount. The Mudra Yojana scheme has several plans depending upon the type of business expansion level and the aim of availing the loan. The loan limit set by the government under this entrepreneurship scheme for women entrepreneurs is ₹ 10 lakhs. 

Key Features of the Mudra Yojana Scheme

  • The three different categories of Mudra Yojana schemes are – Shishu, Kishore, and Tarun. The loan amount is ₹ 50,000, ₹ 5 Lakhs, and ₹ 10 lakhs under the Shishu, Kishore, and Tarun categories, respectively. 
  • This scheme comes with an affordable interest rate.
  • No collateral is needed for this scheme.
  • The loan tenure can extend up to 36 months from the date of final disbursement of the loan amount. 
  • This loan will also help in working capital financing requirements.

TREAD Scheme

TREAD refers to the Trade Related Entrepreneurship Development Scheme. This government scheme for women entrepreneurs launched with the aim to promote women entrepreneurs. Under this entrepreneurship scheme, up to 30% of the total project value (that is appraised by the bank) is provided to entrepreneurs as financial assistance. The remaining 70% value of the project will be provided by the bank. 

The scheme mainly aims to provide sustainable development to poor women. This is done by helping them in developing their entrepreneurial skills and technical abilities through a support service. 

Apart from counselling sessions and training, credit delivery is another problem faced by poor women. In order to overcome this difficulty, poor women will receive credit cards with the help of NGOs who possess the ability to handle the funds in the right and responsible way. Apart from the funding, these NGOs will also ensure counselling and training sessions for poor women. 

Key Features of the TREAD Scheme

  • 30% of the project value will be given by the Government of India and the rest 70% will be given by the bank that will appraise the project. 
  • Counselling and training will be provided to the women.
  • The Government will provide credit for the MSME-IDs, NIESBUD, IIE, EDIs, and NIMSE. 
  • About 25% of the project amount will be provided by the NGOs, MSMEs, NISIET and Entrepreneurship Development Institutes (EDIs) who will provide the training and counselling sessions.  

Mahila Udyam Nidhi Scheme

Mahila Udyam Nidhi Scheme, also known as the MUN scheme, is one of the entrepreneurship schemes available for women entrepreneurs by the Small Industrial Development Bank of India (SIDBI). This scheme envisions is to provide financial assistance at a concessional interest rate by promoting entrepreneurship among women. The scheme mainly aims to meet the equity gap for women entrepreneurs. 

MUN scheme promotes small sector and MSMEs investments in various industries for growth and excelling in their business areas. It also encourages the SSI units’ reconstruction that is deemed to be incapable but is actually operable to save. 

The loan taken under this entrepreneurship scheme can be used for manufacturing, undertaking service, and production-related pursuits. Women entrepreneurs can take loans up to ₹ 10 lakhs to start their small scale enterprise or a new business venture. The rate of interest under this entrepreneurship scheme varies depending upon bank to bank. 

Loan tenure of 10 years is applicable under this entrepreneurship scheme and along with the moratorium pages of up to 5 years. 

Key Features of Mahila Udyam Scheme

There should be subsisting women entrepreneurs. 

The maximum amount that can be availed is ₹ 10 lakhs.  

The margin amount will be 25% of the loan amount. 

Example: In the case of the loan amount of ₹ 5 lakhs, margin of 25% of the amount, i.e., ₹1.25 lakhs will be taken.

The moratorium period is of five years and the maximum loan repayment tenure is 10 years.

Sometimes 1% of the loan amount can be taken as a service charge.

There is no need for collateral to avail this loan. 

Annapurna Scheme

This loan is mainly for women entrepreneurs in the food and catering industry who are in the process of establishing their business. Under this entrepreneurship scheme, the women entrepreneurs can avail the loan as the capital requirements loan, such as buying equipment, utensils, setting up food trucks, meeting the labour needs, etc. According to the Annapurna Scheme by the Government, women entrepreneurs can sell packaged snacks and food items. It is one of the most common business niches that women entrepreneurs work and excels out as it is something that the housewives are believed to be managing for a long time. This boosts the chance of success for their business and receives better capital and kickstarts to new heights with their newly launched products. The maximum loan amount that can be availed under this entrepreneurship scheme is ₹ 50,000. 

Key Features of Annapurna Scheme

  • Aims to empower the livelihood of poor women.
  • Improving the lives of marginalised people.
  • Funding of up to ₹ 50,000 to the small scale and enterprises dealing with food and catering related businesses.
  • The maximum tenure for loan repayment is up to 10 years.
  • Loan for meeting the capital requirements of the business.

Stree Shakti Package For Women Entrepreneurs

Stree Shakti Package is one of the entrepreneurship schemes for women entrepreneurs under the State Bank of India (SBI). This scheme is tailored by the bank for the women who wish to start their entrepreneurship journey or aim to expand their existing business. The loan under this entrepreneurship scheme can be availed to buy or boost the capital requirements of the business. 

The loan under this entrepreneurship scheme is approved under the term loan or working capital forms. The amount of the loan depends upon the profile of the borrower and the below-mentioned criteria:

  • Retail Traders – from ₹ 50,000 to ₹ 2 lakhs.
  • Professionals – from ₹ 50,000 to ₹ 25 lakhs. 
  • Business Enterprises – from ₹ 50,000 to ₹ 2 lakhs.
  • SSI Units – from ₹ 50,000 to ₹ 25 lakhs. 

As this scheme is aimed at the women entrepreneurs, relaxation or some concession on the margins is an in-built feature along with a low floating interest rate, which is linked to the best interest rate by the bank. 

Key Features of Stree Shakti Package

  • Aimed to uplift the women entrepreneurs.
  • No need for collateral to avail the loan.
  • The loan amount depends upon the profile of the women entrepreneurs.
  • Availing loan amounts exceeding ₹ 1 crore requires collateral.

Bhartiya Mahila Business Bank (BMB) Loan

The Bhartiya Mahila Business Bank (BMB) loan scheme was established on 5th August 2013. This loan supports women entrepreneurs on a big scale. Women have ventured into various fields as entrepreneurs and are constantly working hard for success. The Bhartiya Mahila Business Bank Loan aims to provide economic empowerment to women entrepreneurs. The loan limit under this entrepreneurship scheme is up to ₹ 20 crores. 

Now, this scheme is under the State Bank of India (SBI) which offers loan repayment tenure up to 7 years. 

Key Features of Bhartiya Mahila Business Bank

  • Help the women entrepreneurs expand their business to new horizons.
  • The interest rate on this loan solely depends upon the State Bank of India (SBI) and Reserve Bank of India (RBI). 
  • A combination of term loans and working capital.
  • 0.25% concession on the interest rate for women entrepreneurs.
  • Flexible repayment tenure up to 7 years.
  • No collateral is needed till the loan amount of ₹ 1 crore.

Dena Shakti Scheme

Dena Shakti scheme is one of the entrepreneurship schemes available for women entrepreneurs under the public sector financial institution, Dena Bank. The company started this scheme in order to promote economic development opportunities along with setting an economical empowerment path for women. The bank gave a platform to the women entrepreneurs for availing business loans. The loan under this entrepreneurship scheme intends to meet the working capital requirement or business expansion purposes. The primary goal of the Dena Shakti Scheme is to provide financial support to women entrepreneurs. This scheme is limited to the women entrepreneurs who work in the field of retail, agriculture, manufacturing, or have small enterprises or micro-credit. As per the limits of RBI, the limit of maximum ceilings is also provided to the women entrepreneurs according to the sector that is expanding or has a plan to open a business in. The loan limit under this entrepreneurship scheme is ₹ 20 lakhs.

Key Features of Dena Shakti Scheme

  • Concession of 0.25% on the rate of interest for women entrepreneurs.
  • A combination of term loan and working capital loan.
  • Flexible loan repayment tenure of up to 10 years.
  • Loan scheme for women entrepreneurs in agriculture and allied industries.

Udyogini Scheme

Udyogini Scheme is also known as Udjhyagini Yojana. Udyogini schemes support women to become self-reliant. The word ‘Udyogini’ itself means women entrepreneurs. It is one of the government-initiated schemes for women entrepreneurs for the development and welfare of the entrepreneurs. This scheme has been implemented by the Women Development Corporation under the Indian Government. 

The Udyogini Scheme will help the women entrepreneurs to be on the path of self-development and empower them to be economically strong. Loan under the scheme is given to the budding women entrepreneurs at low interest rates in comparison to the soaring up rate of interest by the private financial institutions. It is also a trustworthy source for borrowing money. 

The scheme is valid for women entrepreneurs whose family income is below ₹ 40,000 per annum. The loan under this entrepreneurship scheme is especially encouraged for the service and trade sector. The cap amount is ₹ 1 lakh. The maximum loan amount that can be availed under the scheme is ₹ 3 lakhs.

Udyogini scheme focuses on undertaking and organising skill development training sessions for women along with providing financial assistance. 

Key Features of Udyogini Yojana

  • Skill development training sessions for women entrepreneurs.
  • Loan amount up to ₹ 3 lakhs for funding the small business.
  • Loan under this entrepreneurship scheme is available for 88 small scale enterprises and industries.
  • Loan subsidy up to 30%
  • Transparency in the evaluation process of beneficiaries.

Cent Kalyani Scheme

Cent Kalyani Scheme aims at both the new businesses and those who want to grow and expand their business. The only specific emphasis of this scheme is on women entrepreneurs. The Central Bank provides business loans to the women entrepreneurs under this entrepreneurship scheme. Education and training, retail trade, and self-help groups are not eligible for the loan under this entrepreneurship scheme. The eligible categories for the Cent Kalyani scheme are mentioned on their website with the required details and rules. 

The loan amount under this entrepreneurship scheme does not require collateral and has zero processing fees. The selected category of women entrepreneurs’ business, under this entrepreneurship scheme, can avail this loan and expand or start their business. A maximum loan amount of ₹ 100 lakhs can be sanctioned. 

The Cent Kalyani scheme aims at creating sustainable and continuous employment opportunities via business expansion and growth for women entrepreneurs. 

Key Features of Cent Kalyani Scheme

  • Loan amount up to ₹ 100 lakhs can be availed.
  • The term loan is 25% of the loan amount.
  • Loan repayment tenure up to 7 years along with 6 months or 1 year moratorium period.
  • Zero processing charges.
  • Need of no collateral for availing the loan. 

Summing it up

To break the centuries of regressive conventions, the women in India have come out of the cocoon and carved a niche for themselves in the business sector. Working in the corporate sector has given them their financial independence and a way to demonstrate their managerial skills. The world of entrepreneurship has given them the confidence to face the world and lead it in their way. The Indian Government and other financial institutions in the country are also promoting entrepreneurship among women with different schemes for women entrepreneurs. The schemes available for women entrepreneurs help them drive their business goals. They are taking every possible way to provide them assistance and uplift the status of women in society.

FAQs

Can a housewife apply for a Mudra loan?

Housewives can apply for the Mudra loan under the established private and public financial institutions for the Mudra Scheme.

Who is eligible for Mudra Yojana?

Anyone who is running a small scale business or small enterprise is eligible to apply for the Mudra Yojana.

How much loan can I get in Mudra Yojana?

About ₹ 10 lakhs as a maximum amount can be availed under Mudra Yojana.

Who is eligible for a Mudra bank loan?

Any citizen of India who has a business plan for generating non-farm income through the means of manufacturing, trading, processing, or the service sector is eligible for the Mudra bank loan.

What is a TREAD scheme?

TREAD Scheme refers to Trade Related Entrepreneurship Assistance and Development Scheme, mainly for the women entrepreneurs. This scheme empowers women by providing credits, training, counseling, and development sessions related to services, trades, products, etc.

In which year plan the TREAD scheme was launched for women entrepreneurs?

In the 9th plan period, Trade-Related Entrepreneurship Assistance and Development Scheme (TREAD Scheme) was introduced for the economic empowerment of women entrepreneurs.

What is the Mahila Udyam Nidhi scheme interest rate?

The interest rate on the loan amount in the Mahila Udyam Nidhi Scheme depends upon the cost of the project. Hence, to get the exact rate of interest, one needs to calculate the project cost first.

Which bank introduced Mahila Udyam Nidhi?

Small Industrial Development Bank of India, also known as SIDBI, introduced the Mahila Udyam Nidhi scheme for financial assistance and credit facilities to women entrepreneurs.

How can I get a Mahila Udyog loan?

Women entrepreneurs can apply for this loan after checking that they are eligible by checking the requirement details of the loan.

When was the Annapurna Scheme introduced?

Annapurna Scheme was introduced on 1st April 2000 for the food security business requirements and empowerment to the women entrepreneurs.

What is the objective of the Stree Shakti Programme?

The Stree Shakti Programme aims to provide economic development to the women living in the rural areas of the country.

 

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