In today’s post, we are going to talk about how women entrepreneurs can make a difference in society with their contributions by availing business loan for women. Without women’s contribution, we can’t think about great India.
In a patriarchal society like India, women have been struggling hard to break the shackles of old prejudices and practices, removal of which will also give them the confidence to be self-dependent and will come across as the major counterpart contributing towards the growth and prosperity of the economy.
Premillennial women faced a lot of difficulties and restrictions to also join the workforce and support their families financially. There were major roadblocks to achieving her entrepreneurial dream which was:
- Lack of social support – Male chauvinist attitude of the male members of the family such as husband, brother and fathers do not allow women to start their venture and the lack of trust on the women does not let women live her entrepreneurial dream
- Lack of collateral support – females have very few securities on their name and if there is a property in the name of the family then they have to depend upon their male counterparts like her father to provide a guarantee for her loan application
- Limited financial Knowledge – lack of proper financial guidance & knowledge does not let women entrepreneurs get appropriate financial assistance required for running her business.
- Lack of confidence to approach financial institutions for loan – Few women lack confidence and are not bold enough to gather courage and walk up to the financial institutions for a business loan, even when their business ideas are fresh and unique.
- Lack of support from the banking and private investors – these fund investors show no or very less confidence on women entrepreneurs and fail to recognize their ability to make a considerable difference
As more & more females are getting educated & literate, they have started understanding the business environment around themselves. The knowledge has helped them to seek financial assistance from various sources.
Various schemes have been introduced by banks & other financial institutions that support women entrepreneurs with financial assistance:
1. Annapurna Scheme by The State Bank of Mysore & Bharatiya Mahila Bank
Under this scheme, the Government of India offers loans up to Rs. 50,000. The amount will be used as a fund for working capital needs such as cutlery, gas connection, refrigerator, purchase of utensils, etc. and other kitchen appliances for cooking purposes. The important information regarding the scheme is:
- A guarantor is required to avail the loan
- Assets of the business will be mortgaged against the collateral
- If the loan is sanctioned, then the repayment needs to be done in 36 months or 3 yrs.
- The first month EMI will be waived off when the loan is sanctioned
- The interest rate is determined by the respective bank
2. Cent Kalyani Scheme by Central Bank of India
This scheme can be availed by both existing & new women indulged in agriculture, cottage & rural industries, micro small & medium enterprise, retail trade and government-sponsored undertakings. The important information under the scheme is:
- Rs 1 crore loan is sanctioned with a margin rate of 20 per cent
- Collateral security or guarantor not required
- Interest rate is determined and depend on the market rate
- The maximum tenure of the loan is 7 yrs., which includes a moratorium period that ranges from 6 months to 1 year
3. Stree Shakti Package by State Bank of India
It is a unique scheme that provides concessions to women entrepreneurs. The important features are:
- Women should have majority ownership in small business (Above 50% stake)
- Entrepreneurs have to be enrolled in the Entrepreneurship Development Programme organised by the respective state agency
- Women can avail a concession of 0.05% on the loans exceeding Rs 2 lakhs
- No collateral security required for the loan up to Rs 5 lakhs
- The interest rate charged is less than the bank base rate
4. Mahila Udyam Nidhi Scheme by Punjab National Bank & Small Industries Development Bank of India
In this scheme, women get the support of loan up to Rs 10 lakhs to set up a new small scale enterprise. The important things to know under this scheme:
- The repayment tenure is around 10 yrs.
- 5 yrs. Moratorium period is being provided by SIDBI
- SIDBI offers different plans for different businesses such as daycare facilities, beauty parlours, purchase of two-wheelers and three-wheelers, etc.
5. Shakti Scheme by Dena Bank
Women who are indulged in different fields such as agriculture & allied activities, manufacturing, retail stores, micro-credit unit, small enterprises, etc.
- Provide loans up to 20 lakhs but the maximum limit is offered based on the nature of the business
- Also, provide a concession of 0.25% on the rate of interest
- Loan up to Rs 50,000 is offered to women indulged in the micro-credit unit
6. Bhartiya Mahila Bank Scheme by State Bank of India
Offers business loan of up to Rs 20 crores for meeting the requirement of working capital, business growth or for the activities in manufacturing units. There are three plans under this scheme:
- Annapurna Plan (already mentioned)
- Shringaar Plan – The loan is available for housewives or self-employed women who want money to setup beauty parlours, salon, spa and for other expenses associated with it such as purchasing equipment’s, meeting daily expenses, etc. The important features are:
- The loan is offered without any security which is covered under CGTMSE scheme
- Applicant age is a minimum of 20 yrs. and a maximum of 60 yrs.
- The repayment tenure is a maximum of 7 yrs.
- Tie up with Naturals, Cavinkare & Lakme
- Parvarish Plan – Similarly this loan is also available for housewives or self – employed women to set up daycare creches. The maximum limit of the loan is 1 crore without any collateral security under the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGSTSM)
Additional mediums for getting Business Loan
Pradhan Mantri Mudra Yojana Scheme
The loan can be also availed by women entrepreneurs for doing business of beauty parlour, boutique, tuition centre, etc. Women get a loan amount in the range of Rs 50,000 to Rs 50 lakh under the three plans – Shishu, Kishore & Tarun. An important feature of the scheme is that no collateral or guarantor is required for the loan up to 10 lakhs
Orient Mahila Vikas Yojana Scheme by Oriental Bank of Commerce
The loan is given to the women, who hold majority share capital ( at least 51%) in a proprietary concern. The important features are:
- No collateral security for the loan in the range of Rs 10 lakhs to Rs 25 lakhs for small scale industries
- The repayment period of the loan is 7 yrs
- Concession of 2% on the interest rate
Women Loans through Ziploan (An RBI registered NBFC)
Offers collateral-free business loan for women. The important features are :
- Business loan up to 5 lakhs without any collateral
- Repayment Tenure is flexible that ranges from 6 months to 24 months
- The loan is disbursed within 3 days
- Minimal Documentation is required, which is limited to (KYC, Bank Statement and ITR)
- No prepayment penalty is charged
- Loan is offered at a competitive interest rate
Due to the availability of the Women Friendly business loan schemes now females can also step forward and live their dreams of becoming a successful entrepreneur.