4 Helpful Loans For Women Entrepreneurs To Raise Funds
According to the Sixth Economic Census conducted by the Ministry of Statistics and Programme Implementation (MoSPI), women account for 13.76% of the total entrepreneurs in India. This low representation can be due to many factors such as less favourable working conditions, socio-cultural biases, or lack of business resources.
To alleviate such issues and promote and encourage women entrepreneurship, the Government of India, national and private financial institutions have introduced/launched several credit schemes. Under these, women entrepreneurs can avail financial products like a business loan and start their own venture.
Though numerous options are available in the financial market, the following are the top four loans that help women entrepreneurs obtain funds for starting their dream business.
1.Stand Up India
The Government of India launched the Stand-Up India scheme to encourage women and those belonging to SC/ST communities to take up entrepreneurship. This scheme aims to provide business loans ranging from Rs. 1 lakh to 1 crore to a minimum of one woman entrepreneur and SC or ST borrower (above 18 years age) per bank branch to set up a green-field enterprise. Enterprises associated with manufacturing, services, trading sector, and agri-allied activities can avail a composite loan, including term loan and working capital.
However, for non-individual enterprises, the scheme demands that 51% of that company’s stake be held by either a SC/ST or a woman entrepreneur. They can obtain this loan without any collateral. However, they are required to have a guarantor. Loans under Stand Up India come with a repayment period of 7 years and a maximum moratorium period of 18 months.
Launched by the Government in 2015, the Pradhan Mantri Mudra Yojana (PMMY) provides loans to individuals, including women entrepreneurs. Under this scheme, women entrepreneurs can avail a loan ranging from Rs. 50000 to Rs. 100000. Those who are willing to start a new business or wish to expand their existing one can raise working capital through a MUDRA loan. This collateral-free loan comes with a repayment tenure of up to 7 years.
Under PMMY, MUDRA offers three products, namely Shishu, Kishore, and Tarun. The three loan scheme signifies the stage of growth as well as funding needs at each successive step. These are discussed below:
Shishu – Provides loan up to Rs. 50000 to establish a new business.
Kishore – Provides loans ranging between Rs. 50000 and Rs. 5 lakh for well-established organisations.
Tarun – Offers loans from Rs. 5 lakh to Rs. 10 lakh for business expansion.
The loan availing process becomes streamlined and easier when women entrepreneurs apply for formal credit facilities through MANDII, an online marketplace. Here, women entrepreneurs can select lenders and financial products as per their choice. Moreover, the end-to-end monitoring of loans and easy-to-use platform help female entrepreneurs get credit facilities without stressing about calls from various lenders.
3.Bhartiya Mahila Bank loan
Under the Credit Guarantee Fund Trust For Micro and Small Enterprises (CGTMSE) scheme, Bhartiya Mahila Bank (BMB) offers financial facilities to promote women entrepreneurship. BMB merged with the State Bank of India in 2017. Business loans provided by Bhartiya Mahila Bank under CGTMSE includes –
- BMB Annapurna
- BMB Shringaar
- BMB Parvarish
- BMB SME Easy
Read the information given below to learn about the various loan options in detail.
|Bhartiya Mahila Bank Loans|
|1.||Loan types||BMB Annapurna||BMB Shringaar||BMB Parvarish||BMB SME Easy|
|2.||Age limit||18-60 years||20-60 years||21-55 years||Depending on the profile and SME requirement|
|3.||Purpose of the loan||To establish a food catering business for selling lunch/tiffin packs||To help set up a beauty parlour||To establish a business in trading, services and manufacturing||To help form day-care centres|
|4.||Repayment tenure||Up to 3 years||Up to 7 years||Up to 7 years||Up to 5 years|
|5.||Collateral||Not needed||Not needed||Not required for loan amount up to Rs. 1 crore||Not needed|
4.Mahila Udyam Nidhi Yojana
Offered under the Small Industrial Development Bank of India (SIDBI), the Mahila Udyam Nidhi (MUN) scheme aims to extend financial assistance to women entrepreneurs across India. Women entrepreneurs can get a loan of up to Rs. 10 lakh to set up a small-scale venture, including beauty parlours, day-care centres, purchase of two-wheelers, auto-rickshaw, etc.
Also, this credit facility can be utilised by MSMEs to initiate service, manufacturing and production-related activities. Moreover, this fund can be used to upgrade, expand, and modernise an existing business. A business loan under this scheme enables women entrepreneurs to repay within 10 years and avail moratorium period of 5 years.
Over the past few years, the Government and nationalised and private financial institutions have launched various schemes to provide financial assistance and bring women in the frontline of economic activities. With numerous business loan options and their multifaceted beneficial features, women entrepreneurs can now start a business of their own without any trouble.