The economic success of a country depends upon empowering its women. The Indian government and many banks in the country have introduced financial programs to help female entrepreneurs achieve their business goals through business loans for women. All businesses, no matter what their size, require a good supply of working capital to stay in business. Business loan for women is an excellent way to power fuel businesses and hence, the economy.
Despite the excellent potential to run businesses successfully, they are often discouraged by a striking lack of funds. The Government of India has introduced several financial schemes with a business loan for women provision that aims to help women start or expand and grow their businesses, be it for helping a woman set up her own business for the first time or acting as an advisor for entrepreneur about available options for their existing business.
The business loan for women lauds female entrepreneurs with several benefits like low rates of interest, minimal requirements for documentation and payment options that are flexible enough. They are specifically designed in a way to cater to ensure that female entrepreneurs become financially independent.
Eligibility criteria to be able to apply for it constitutes
- Â Entrepreneurs that are planning to establish beauty parlours or other micro ventures as their first business are eligible for a business loan for women between the ages of 20-60.
- Female-owned businesses or partnerships that have women as major stakeholders and microenterprises or the ones employing at least one woman for every two employees are eligible to apply for this loan.
Loan Amount:
The business loan for women offered to SMEs comes in two forms: a term loan providing funds to enable the purchase of pieces of equipment and inventory along with other materials required at the time of opening. The second form is working capital loans which pay regular expenses (such as rent and wages) over a period of months. For beauty parlours & mdashfor example— the loan amount ranges from Rs 25,000- Rs 1 crore
Security/Guarantee:
Term loans are often believed to be risky as per the financial institutions due to which they always require some collateral as a guarantee from the borrower. However, women applying for government-sponsored microloans can get loans amounting up to 1 million rupees without anyone else acting as a power of attorney over their property, should something goes wrong with the loan.
Rate of Interest:
Term loan interest rates resemble rates that banks and financial institutions offer. However, women often get discounts and concessions while applying for these loans.
Apart from these, there are several benefits and offers available for female entrepreneurs who wish to start their own beauty parlours and salons. Some of the institutions that can be approached for a small business loan include
Here are the some business loan for women in India
- Bharathiya Mahila Bank – Shringaar
- Stree Shakti Package by SBI
- Dena Shakti Scheme
- Udyogini Scheme
- Cent Kalyani Scheme
- PNB Mahila Udyam Nidhi Scheme
- Orient Mahila Vikas Yojana
- MUDRA Yojana Scheme for Women
1. Bharathiya Mahila Bank – Shringaar
This business loan for women is specially designed for women who want to establish their own beauty parlours. In partnership with leading salon brands like Naturals, CavinKare & Lakme Ltd., this scheme has brought about better products and services at very affordable prices to the customers in the market. This loan can be availed in two forms: term loans and working capital loans. The funds can necessitate the purchase of the land and building where the salon can be built and where the equipment can be stored.
Under the CGTMSE loan facility of the Government of India, no collateral is required to acquire loans up to Rs. 1 crore (the US $17,000). Currently, between 10.15% – 13.65% is the rate of interest offered . A concession on interest rates is also available for qualified women applicants: a 0.25% discount off their principal amount Repayment can be made over 7 years.
2. Stree Shakti Package by SBI
The focus of this is to give a push to female entrepreneurship in India and to get as many institutions as possible to implement various schemes. One such business loan for women offered by the State Bank of India (SBI) is Stree Shakti Package for Women Entrepreneurs.
This business loan for women is available at the disposal of women entrepreneurs that come under Entrepreneurship Development Programmes (EDPs), which are managed and run by state agencies. Female entrepreneurs whose businesses have more than 50% share in the market can avail of this loan and may obtain loans up to fifty lakh rupees from their bank at prevailing interest rates for term loans. A 0.50% concession is offered for loans which have an amount greater than Rs. 2 Lacs, and there’s no requirement of security to procure loans up to Rs 5 Crores in value.
Amount of Loan
The Stree Shakti Scheme offers low-interest loans in the form of term loans as well as working capital and aids women establish and set up home-based enterprises. Loans under this scheme are given depending on the profile of borrowers following these guidelines:
- Retail traders: Rs. 50000 to Rs.2 Lakhs
- Business enterprises: Rs. 50000 to Rs.2 Lakhs
- Professionals: Rs. 50000 to Rs.25 Lakhs
- SSI: Rs. 50000 to Rs.25 Lakhs
The package is aimed to provide women entrepreneurs with concessions and relaxations and the low-interest rate that’s linked to the bank’s base rate means that loans cost less than what they usually do.
3. Dena Shakti Scheme
Dena Bank, a public sector banking company explores the vision to promote economic opportunities for female entrepreneurs and empower them economically. Through its business loan program, it provides women business owners access to capital and significantly increases their chances of thriving in the competitive Indian economy. The Dena Shakti Scheme was established by the government of India to enhance financial inclusion in the country through the option of business loans for women. Let’s now take a closer look at this scheme and its details.
The scheme will cover the following sectors:
- Agriculture and allied activities
- Small Enterprises (Direct and Indirect Finance)
- Micro and small (manufacturing) enterprises
- Micro and small (service) enterprises, including small road and water transport operators as well as other businesses.
- Retail Trade
- Micro Credit
- Education
- Housing
Dena Bank Loan Details
The primary objective of the Dena Shakti Scheme is to financially support female entrepreneurs by including all the following activities or sectors under it. Below are details about interest rates, charges and fees for business loans in Dena Bank
Source- https://www.indiafilings.com/learn/dena-shakti-scheme/
4. Udyogini Scheme
This scheme comes up with low-interest rates on any business loan for women it offers. However, it is offered only to women that belong to either scheduled castes or scheduled tribes having family incomes below Rs. 45,000 per year. Loans with amounts up to one lakh rupees are given out by microfinance institutions like the Pragati Mahila Sahakari Bank (PMSB) on behalf of Nabard under this program. The Punjab & Sind Bank has started a scheme to empower women. There are other banks too like Karnataka State Women’s Development Corporation (KSWDC), that have replicated the same program.
Additionally, for the widowed, destitute or disabled women in the SC/ST category, an additional 30% subsidy is offered on their loan amount or Rs. 10,000 are given(whichever is lower). For women from general categories, 20% get reimbursed for similar loans Rs 7500 being the maximum benefit available to them
Objectives of Udyogini Scheme
The Karnataka state government’s prime objective for implementing this scheme is to empower women in the process of becoming self-reliant by working at micro-enterprises and not having to borrow money at high rates from lenders. In addition to offering financial help, it also works for their skill development and training.
5. Cent Kalyani Scheme
With this scheme, women can start new projects or expand existing ones as it provides assistance in the form of capital expenditure (to purchase machinery) as well as working capital as the money for day-to-day operations.
The RBI has launched a new scheme to help women with small businesses or involved in agriculture. The loan is up to Rs 1 crore and does not require any guarantees or collateral.
6. PNB Mahila Udyam Nidhi Scheme
The Punjab National Bank offers an exclusive scheme for female business owners who are looking to expand and upgrade their existing units or set up new ones. This is an excellent option as a scheme in case you planning to modernize or adapt to newer technologies for your existing processes and structures. The maximum loan amount cap that’s offered by the government body is Rs 10 Lacs, and it must be repaid within a period of ten years during which there will be no payments but interest may accumulate on unpaid instalments.
Which businesses are eligible for Mahila Udyam Nidhi?
- Repairing of TV (LED, LCD and CRT)
- Mobile repairing centre
- Repairing appliances such as washing machines, refrigerators and other electronic devices.
- Daycare for children and Crèche
- Shop that repairs cars, trucks and motorcycles
- Farm and agricultural equipment maintenance
- Beauty Parlour and Spa
- Cable TV Network
- Eateries, Restaurants, Dhabas
- Photocopying centre
- Desktop publishing business
- Cyber Cafes
- Training centre or tailor’s shop
- Educational centres/ training institutes
- Centre for training typists
- STD, ISD Booths
- Purchasing auto-rickshaws
- Buying motorcycles and cars to be used for business purposes
- Road transport business
- Laundry & Dry Cleaning
7. Orient Mahila Vikas Yojana
Oriental Bank of Commerce started this scheme to enable small businesses owned and run by women and to help them get their businesses off the ground. In order to qualify for getting this loan, the entrepreneurs must own at least 51% of the business. A loan of up to 10 million rupees may be taken out by a borrower without having to provide security or collateral. The maximum repayment period is 7 years and the interest rate is 2% lower than normal rates.
8. MUDRA Yojana Scheme for Women
The Pradhan Mantri Mudra Yojana (PMMY) offers various schemes and products which are aimed at supporting the growth and funding needs of micro-entrepreneurs. These are divided into 3 segments based on units’ stage of development—
- Shishu offers loans of up to Rs. 50,000.
- Kishor offers loans of up to Rs. 5 lakhs
- Tarun lending up to Rs. 10 lakhs on secured loans
The government offers loans to women entrepreneurs through the MUDRA scheme. These loans are available at a reduced interest rate for women business owners. There are many financial products for women entrepreneurs that can help set up a beauty parlour. People should approach any bank or NBFC near them to learn more about these business loan products.
