Finances are crucial to every business. It is the foundation of every business. Particularly, there are less women business owners than there are men in the nation. When women pitch in the concept of launching a business, very few of them receive financial support from their homes. To address this issue, a number of government schemes for women entrepreneurs have been launched as special loan programmes who wish to launch their own enterprises and who are looking for financial support to expand their existing ones. In this article, we’ve discussed a variety of business financing schemes that have been established to help female entrepreneurs become financially independent and for those looking for chances to develop a business or grow an already existing one.
Government Schemes for Women Entrepreneurs – Highlights
In order to provide a supportive environment for aspiring and established women entrepreneurs nationwide, NITI Aayog has launched the Women Entrepreneurship Platform (WEP). SIDBI and NITI Aayog have teamed up to support this programme. WEP is founded on the three pillars of Iccha Shakti, Gyaan Shakti, and Karma Shakti as an enabling foundation.
- Iccha Shakti stands for encouraging aspiring businesspeople to launch their ventures.
- Gyaan Shakti stands for educating women entrepreneurs and supporting their ecosystem so they can grow their businesses.
- Karma Shakti stands for offering practical assistance to business owners as they launch and expand their enterprises.
Government Schemes For Women Entrepreneurs In India
Mudra Loan for Women
Under the Pradhan Mantri Mudra Yojana, the Indian government created the Mudra Yojana Scheme to promote female entrepreneurs. They are looking for a business plan for opening a salon, school, tailor store, etc. For the loan to be granted under this plan, no collateral is needed. A mudra loan application can, however, be made under certain categories. These are what they are –
- Shishu Loan: The highest loan amount given to start-up companies in their initial stage is Rs. 50,000.
- Kishor Loan: This loan is for existing businesses that want to enhance their services. The amount is from Rs. 50,000 to 5 lakh rupees.
- Tarun Loan: This loan is for established businesses that need money to grow but don’t have enough; they can get up to Rs. 10 lakhs for the project.
The Indian government provides loans up to 50,000 rupees to female food caterers under the Annapurna Yojana. The borrowed money could be used to cover working capital needs, such as buying kitchenware, a mixer/cumulative grinder, a hot case, tiffin boxes, etc. The lender is exempt from making the first month’s EMI payment after the loan is approved. The money must be paid back in 36 monthly installments once it has been approved. Based on the market rate and the relevant bank, the interest rate charged is decided.
Stree Shakti Yojana
Women who own the majority of the company are eligible for this Stree Shakti scheme. These female business owners must also sign up for the Entrepreneurship Development Programme (EDP) run by the relevant state agency. Women can take advantage of a 0.05 percent interest discount under the Stree Shakti scheme on loans worth more than 2 lakh.
Dena Shakti Scheme
For female business owners in agriculture, manufacturing, microcredit, retail outlets, or small companies, the Dena Shakti Scheme offers loans up to Rs. 20 lakh. The programme also offers a 0.25 percent rate of interest concession. Under the microcredit category, women business owners are eligible for loans of up to 50,000.
Bhartiya Mahila Bank Business Loan
This public sector banking organization, The Bhartiya Mahila Bank (BMB), provides loans to female entrepreneurs for working capital needs, business growth, or industrial firms up to 20 crores. Under the Bharatiya Mahila Bank Business Loan programme, some of the various schemes include –
- Shringaar – The BMB Shringaar loan is for homemakers or self-employed women who are starting a company or who need money for ongoing expenses. You are not required to offer any collateral security in exchange for the loan.
- Parvarish – In a similar vein, the BMB Parvarish loan is for homemakers or self-employed women to open daycare centres. Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGSTSM) plan, the maximum loan amount is $1 Crore and no collateral security is required.
- Annapurna – This loan is available to food entrepreneurs between the ages of 18 and 60 who seek to launch or grow their small companies. Its features are comparable to those of the Annapurna plan offered by the State Bank of Mysore, with the exception that no collateral security is required.
Mahila Udyam Nidhi Yojana
The PNB and the SIDBI both provide the Mahila Udyam Nidhi Scheme. The programme provides loans up to Rs. 10 lakh to be repaid over a period of ten years in order to assist female entrepreneurs in starting new small businesses. The market rates determine the interest rate that is charged.
Orient Mahila Vikas Yojana Scheme
Through the Orient Mahila Vikas Yojana, which Oriental Bank of Commerce introduced, women who individually or jointly own 51 percent of the share capital of a proprietary firm are eligible for loans. For loans between 10 lakhs and 25 lakhs, collateral is necessary. The loan has a seven-year repayment period. A discount on the loan rate of up to 2 percent is also offered through the Orient Mahila Vikas Yojana Scheme.
Cent Kalyani Scheme
Both new and established business owners as well as women who are self-employed can take use of the Cent Kalyani Yojana. The Cent Kalyani Scheme accepts applications from micro/small businesses such as farming, agriculture, cottage industries, and retail trade. No guarantors or collateral is required as security for this loan, and neither are you. Loan interest rates are determined by market rates. The loan will have a maximum seven-year repayment period.
The Udyogini Scheme is being carried out by the Women Development Corporation on behalf of the Indian government. By giving women financial help, this programme encourages and supports women’s entrepreneurship among the underprivileged. This programme primarily serves and aids illiterate women who reside in rural and underdeveloped areas.
Indian Government Schemes for Women Entrepreneurs – Benefits of the Schemes
- WEP will support entrepreneurs by encouraging them to share their entrepreneurial journeys, stories, and experiences in order to foster mutual learning, in addition to offering services like free credit ratings, mentorship, funding support for women entrepreneurs, apprenticeship, and corporate partnerships.
- As a catalyst for change, the WEP platform will collaborate with partner groups to support offline activities and outreach programmes to encourage the entrepreneurial spirit among potential women business owners.
- Additionally, WEP provides incubation and acceleration support to women-founded and co-founded firms through its numerous partners, who hold up and support women entrepreneurs registered with WEP as they launch and expand.
Eligibility for all Types of Government Schemes
- Women entrepreneurs can register for the programme and benefit whether they are in the ideation stage, have recently launched their businesses, or have an established business.
- Organizations, NGOs, research institutions, incubators, accelerators, etc. that can offer assistance to female entrepreneurs in any way.
They are introduced in an effort to raise women entrepreneurs financial conditions and give them security so that they can live better lives.
Governments typically aim to encourage entrepreneurship since flourishing enterprises create value for the general public and it supports women to be independent.
SBI and SIDBI provide financial support under Mahila Udyam Nidhi Scheme.
The loan amount limit for Annapurna Scheme is upto Rs. 50,000.
Kishor Loan is specifically provided to the existing businesses that want to enhance their services. The amount is from Rs. 50,000 to 5 lakh rupees.