Progress and economic growth of the society is also dependent on empowerment of women. One can see cases all around where women are sometimes the sole breadwinners or play a huge supporting role with a second income that contributes to the family prosperity. Given the tough working conditions in jobs and the need to adhere to a strict schedule, it would be better for women to run their own business according to their skills, knowledge, capabilities and preferences. Women can set up a new business or expand an existing one with a Business loan.
The Government of India makes it easy for women looking to start their own business to get their project off the ground with several schemes for a loan for women. Read on to know more about initiatives of small business loans in India specifically for women entrepreneurs.
Udyogini Scheme for women
The Udyogini Scheme is an initiative of the Women Development Corporation under the aegis of the Government of India. This is specifically for the economically disadvantaged and illiterate women in rural and backward areas of India. Women can avail of this loan to start a new business or to expand an existing one. The loan covers purchase of machinery and equipment and there is no collateral required except the machinery purchased through the loan.
Bhartiya Mahila Bank Business Loan for Women
This is an initiative of the public sector banking company, The Bhartiya Mahila Bank. Women entrepreneurs can avail of loans up to Rs 20 crores to cover working capital, machinery purchase, stocks and business expansion. The loan scheme has several subsets as described below.
The Annapurna loan from Bhartiya Mahila Bank is available to women aged 18 to 60 years of age, mainly for small or micro scale food catering business. The loan covers purchase of necessary equipment and some working capital and may be limited to Rs 50000 to be repaid in 3 years. The Government of India offers the special Annapurna yojana with the proviso that the borrower does not have to pay EMI for the first month after obtaining the loan.
This is yet another micro loan scheme aimed at homemakers who wish to start their own home based business to meet family expenses. No collateral or security is required but loanees must obtain the loan from their bank and pay the interest.
This loan is specifically for women who wish to set up day care centers for children. One can avail of loans up to Rs 1 crore without security through the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme but this does involve quite a bit of paperwork due to the amount involved.
Orient Mahila Vikas Yojana Scheme
The Oriental Bank of Commerce offers this scheme for women who have 51% ownership in a proprietary concern. One can avail of loans between Rs 10 lakhs and Rs 25 lakhs and the bank requires collateral. The tenure is 7 years and interest is charged at the usual rate with a concession of 2%.
Mahila Udyam Nidhi Yojana
Similar to the Orient Bank scheme, this small business loan in India is from the Punjab National Bank in association with the Small Industries Development Bank of India. Women can avail of loans up to Rs 10 lakhs with a 10 year repayment schedule with interest charged at the current rate.
Cent Kalyani Scheme
Women who wish to start a business or expand an existing one can avail of this loan. No collateral security is required and loanees do not have to provide a guarantor. The loan must be repaid within 7 years at the prevailing rate of interest charged by banks.
Mudra Loan for Women
The Mudra loan is available for everyone, with the upper age limit of 65, either to start a business or expand an existing one or to meet working capital requirements. There also is a specific Mudra loan for women to help them start home based coaching service, a beauty parlor or garment manufacturing. No collateral is required and the applicant has to go through their bank in which they must have an account for at least 6 months. There are 3 categories under this scheme:
- Shishu: The maximum upper limit of the loan is Rs 50000 to enable women to start and run micro enterprises.
- Kishor: The amount available is from Rs 50000 to Rs 100000 under the Kishor scheme and repayment period is around 3 years with interest at the prevailing bank rate.
- Tarun: Loans up to Rs 10 lakhs can be availed under this scheme by women running an established business in order to expand and improve working capital requirement. Check tenure and rate of interest with your bank in which you have an account.
Stree Shakti Yojana
Yet another offering in the small business loan in India for women packages is the Stree Shakti Yojana. Women who hold a majority stake in an existing business can apply for this loan for women and it is also a requirement that they should undergo the Entrepreneurship Development Program. The amount of loan is Rs 2 lakhs and more at the prevailing bank rate of interest, less a concession of 0.05 percent for loans higher than Rs 2 lakhs.