Government Business Loan Schemes for Women Entrepreneurs in India

Indian women had long faced the challenge of not securing loans to start their businesses. A report by a media channel showed that 39% of Indian women had been dependent on their personal savings to obtain loans. Burning their own wealth and keeping their personal assets at stake had been the customary scenario. However, times have changed, and the Central government has been actively pursuing to improve the scenario. The government took large initiatives to provide business loans for women to improve economic progress. This blog will explain the top schemes that grant secured loans to women in their entrepreneurship journey. But before that, let’s understand why business loans matter for women.

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Why Business Loans for Women Matter

Women in India often face a range of challenges, which drive them to not secure loans for their businesses. Gender inequality, high interest rates and poor work-life balance are some of the major issues that prevent them from starting their own business. Having a business loan for women in India resolves most of the problems. Here are a few reasons explaining them:

Low Credit Issue

The major issue of Indian women receiving low credits is a concerning factor. Although women borrowers have surged, women still face a range of issues while borrowing in terms of bureaucratic followings. Majorly because the loan collateral such as long-term assets and properties are registered in the name of male members, Indian women run short of collateral supply. Many women may not pawn their savings or personal assets to start a business, which is why a government loan for women business is vital.

Low Access to Business Networks

Indian workplaces are slowly steering towards a gender-neutral environment. Since 2023, more women have been roped into executive positions. Despite that, there is a deficiency in the networking opportunities for women. Many women are overburdened with family responsibilities, and are restricted from formal earnings by family values. Moreover, a report by LinkedIn showed that only 16% of Indian managers are women, due to lack of network opportunities. This restricts the disbursement of a loan for female entrepreneurs in India.

Limited Economic progress

India’s economic progress needs a strong spike, which can be done by transforming more women into early-age entrepreneurs. A large portion of the Indian female population remains stuck in subpar roles. A women entrepreneurs loan can let a pool of female talents transcend economic barriers and shape the nation’s economic progress.

Read the top 5 government subsidy loans for any entrepreneur to avail.

Top Government Business Loan Schemes for Women Entrepreneurs

Through the loan schemes, the Government of India has provided financial aid of ₹30.64 crore to women entrepreneurs. Here are some of the government schemes for women entrepreneurs:

1. Mahila Coir Yojana

Scheme details: Meant exclusively to improve the skillset of women in the coir industry, this scheme grants ₹3,000 to every woman enrolled.

Eligibility for enrolling: Meant for rural women artisans

2. Mahila Samriddhi Yojana

Scheme details: This scheme provides business loans for women up to ₹1,40,000. Mahila Samriddhi Yojana works as a micro financial aid for Indian women, meant to create financial independence.

Eligibility for enrolling: Women belonging to the backward classes and earning less than ₹3 lakhs per annum

3. Stand-up India

Scheme details: Facilitating women belonging to the minority and SC/ST class, this scheme provides small business loans for women between ₹10 lakh to ₹1 crore at minimal interest.

Eligibility for enrolling: This scheme is developed for women belonging to the SC/ST tribe only. Moreover, the scheme is applicable to utilisation in any greenfield project, such as manufacturing or agri-allied services project.

4. Support To Training And Employment Programme For Women

Scheme details: This scheme comes with major benefits, one is to inculcate skills in a woman for finding employment. The other benefit is to improve the competency of a woman to become an entrepreneur.

Eligibility for enrolling: The woman has to be more than or equal to 16 years of age.

5. Mahila Udhyami Yojana

Scheme details: In this scheme, the government provides business loans for women up to ₹10 lakhs with zero collateral and low interest rates to women entrepreneurs. The major benefit of this scheme is that women entrepreneurs can subscribe to the loan without having to apply for any collateral deposit.

Eligibility for enrolling: This scheme is only for women entrepreneurs who are managing any manufacturing facility. Women entrepreneurs such as rural artisans, running beauty parlours, and phone repairing can apply.

6. Nai Roshni

Scheme details: This scheme equips women with the necessary skills to be employed in governmental banks and financial institutions. This scheme is excellent for nurturing entrepreneurship traits in a woman, as it educates on leadership, financial literacy and digital literacy.

Eligibility for enrolling: The woman has to be a member of a minority community or belong to a rural area.

7. Mahila Shakti Kendra

Scheme details: This scheme fosters women's entrepreneurship spirit through community participation. Through this scheme, women are provided intensive training and made employable.

Eligibility for enrolling: This scheme is eligible only for rural women.

8. BIRAC-TiE WInER Awards

Scheme details: Women entrepreneurs often face strong challenges to find funding for their startup projects. Under this scheme, a loan for female entrepreneurs up to ₹5 lakhs is sanctioned.

Eligibility for enrolling: This loan is available to women entrepreneurs with startup ideas only in the biotech, life science, and pharmaceutical sectors.

MSME Loan for Women: Eligibility and Benefits

India is a host to 5.70 crores of MSMEs, where a large fraction of entrepreneurs are women. The Indian government, to aid these women-led MSMEs, has launched several schemes that not only provide fiscal backing to women but also strengthen their business position. Here are some of these schemes:

9. Credit Guarantee Scheme For Women

Scheme details: This MSME loan for women is a highly beneficial one for all the women inhabiting the North East region of India. Under this scheme, the government offers credit facilities to ₹5 lakhs at only a 1% interest rate, to 50 lakhs at 1.35% and to ₹200 lakhs at a 1.8% interest rate.

Eligibility for enrolling: Any women entrepreneur operating manufacturing services registered under the MSMED law is eligible to apply. This scheme, however, excludes agro-based activities and self-help groups.

10. Prime Minister’s Employment Generation Programme (PMEGP) Scheme

Scheme details: This scheme is a boon for all women entrepreneurs, from both urban and rural areas of India. The PMEGP scheme offers MSME loan for women at a highly subsidized rate. Women categorised under Special Category, and belonging to the urban areas are sanctioned credit at 25%, while women from rural areas are eligible for credit at a subsidy of 35%.

Eligibility for enrolling: This scheme applies to women belonging to Special Category

Also, read the MSME 45 Day Payment Rule applicable for all MSMEs throughout India.

Small Business Loans for Women: Key Features and Interest Rates

Here are some of the small business loans for women along with their interest rates.

11. Cent-Kalyani Scheme

Scheme details: In this scheme, all Indian women are allotted a loan maximum of 1 crore with a repayment tenure of 84 months. For all the women who wish to start their business but are without any collateral security, this loan is meant for them. This business loan for women in India has been implemented majorly to empower women to have complete financial autonomy to start their ventures.

12. Trade Related Entrepreneurship Assistance and Development (TREAD)

Scheme details: In the TREAD scheme, the government allows a grant of 30% of the total project cost for training women entrepreneurs. NGOs that are actively promoting women's entrepreneurship can get enrolled in this scheme online.

Eligibility for enrolling: Only NGOs and training institutions that actively promote women's entrepreneurship can avail of this scheme

13. MUDRA Loan for Women Entrepreneurs

Scheme details: MUDRA Loan for women had been upvoted by millions of Indian entrepreneurs, as the loan facility offers a concrete financial backup for all women. Under Pradhan Mantri Mudra Yojana (PMMY), women entrepreneurs actively running and managing any small-scale or micro-businesses, can avail of a loan of ₹10 lakhs at the minimal interest rate.

Eligibility for enrolling: Any women entrepreneur operating a micro and small business can avail of this loan, sanctioned by the Central Government.

How to Apply for a Government Loan for Female Entrepreneurs

Applying for a government loan for women to start business requires four main steps. Here is a brief outline:

Visit Official Portal

You can begin by first visiting the bank’s official site, or by simply visiting the government portal for registration. Different banks offer various loan schemes, such as ICICI Lombard offers government loans for women under the Stand Up India Scheme. If you are a woman entrepreneur and wish to initiate your own business, you may select the scheme first and visit the concerned bank to avail of the loan.

Fill Application Form

The immediate following step will be to download and sign the application form. You can get this application form either online, available directly in the government portal, or download it from the bank's official portal.

Prepare Official Documents

You may need to submit an electronic scanned copy of each required document to the bank portal. In case you are visiting the bank branch, you may have to submit hard copies of the documents. A generic list of all the needed documents is as follows:

• Aadhar Card
• Voter’s ID card
• PAN Card
• Caste Certificates in case the woman is a member of the ST/SC caste
• Address proof (this can include electricity bill/rental agreement notice)
• Income Certificate from a Gazetted Officer
• Bank account information
• Passport sized photograph

Apply Online For Verification

After collecting all the required documents, you may submit them online or offline by visiting the bank branch to avail of this business loan for women in India. You will be receiving a request letter after successful verification of all your documents. Post this, the amount for women entrepreneurs loan will be credited directly to your bank account.

Conclusion

The Central Government had been quite proactive in women's entrepreneurship, for which it had launched several schemes. Getting business loans for women is easier than thought, as the government had consolidated sufficient funds to allocate for these schemes. Any woman with a strong willingness for financial self-reliance can just visit the government portal and register for these schemes. These schemes for a government loan for women to start business have been helping millions of women throughout the nation.

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