Top 5 Small Business Loans for Women Entrepreneurs in India
“Success is not about how much money you make. It’s measured by how much of a difference you make in other’s lives.” This quote is so relevant for the hundreds of thousands of women entrepreneurs in India. Facing massive odds, they put in all their effort to run a successful business, to uplift their children, family and the entire community.
Though women make up nearly one half of the population (48%), only 20% participate in the workforce. Of these women, only a tiny percentage of working-age women run their own business ventures. According to the sixth economic census, only 1 in 7 entrepreneurs in India is a woman.
India needs more women entrepreneurs to succeed and benefit the nation’s economic, social, and cultural development. To encourage women entrepreneurs, the government of India and banks have plenty of credit schemes just for women in business.
Additional Reading: 5 Best Ways Women Entrepreneurs In India Can Avail Business Loans
Top Small Business Loans in India offered Exclusively to Women Entrepreneurs
- CENT Kalyani Scheme
Currently, it’s one of the popular business loan schemes in India for women entrepreneurs. The Central Bank of India extends this loan to businesswomen to establish, expand or modernise a business unit.
Key Highlights:
| Eligibility | Existing and New women entrepreneurs for their MSME enterpriseProfessionals and self-employed womenTransport operatorsWomen running daycare/creche facilities, beauty parlours, tailoring shops, etc. |
| Loan Usage | To meet capital expenditure (equipment, plant machinery, etc.)To meet day-to-day expenditure |
| Nature of Loan Facility | Term loans or overdraft facility |
| Collateral | Not required as the loan amount is covered under CGTMSE |
| Loan Amount | Maximum of Rs. 100 lakhs |
| Interest Rate | For loans up to Rs. 10 lakhs – MCLR + 0.25% For loans ranging from Rs. 10 lakhs to Rs. 100 lakhs – MCLR + 0.50% |
| Processing Fee | Nil |
- Udyogini Yojana
Udyogini Yojana is a credit scheme implemented by the Women Development Corporation. This scheme offers loans to women entrepreneurs from rural areas and other underdeveloped regions in the country. Various banks and financial institutions like the Punjab National Bank, Punjab & Sind Bank offer loans to aspiring women entrepreneurs under the Udyogini Yojana.
Besides offering loans, the Udyogini Yojana offers financial empowerment, skill development and training to aspiring women entrepreneurs to help them establish their micro-enterprises contributing to the economic growth of their community and other women.
Key Highlights:
| Eligibility | The applicant must be a womanMust be aged between 25 and 65 yearsThe family income of the applicant must be below Rs. 1.5 lakhs per annumThe family income limit does not apply to disabled applicants, widows or destitute women. |
| Loan Usage | Loans are offered to women businesses in 88 sectors, including fisheries, dairy, incense stick manufacturing, groceries, tailoring shops and several others. The loan amount is provided to set up a woman-run business venture. |
| Collateral | Not required |
| Loan Amount | Up to Rs. 3 lakhs |
| Interest Rate | Depends on the lending institution. The government offers a 30% subsidy on loans extended under this scheme to make it easy for the women borrowers to repay on time. |
- Stree Shakti Package for Women Entrepreneurs
This is the women-only loan from SBI, the largest public sector bank in India. It’s available at nearly all SBI branches and is offered to women who own at least a 50% share in a business firm or venture.
Key Highlights:
| Eligibility | Offered to women in business who own at least a 50% share in the company. The women applicant must have taken part in a state-run EDP (Entrepreneurship Development Programme). |
| Loan Usage | No restrictions |
| Collateral | Not required for loans up to Rs. 10 lakhsRequired for loans above Rs. 10 lakhs |
| Loan Amount | Depends on the borrower’s profile |
| Loan Tenure | Up to a maximum of 36 months |
| Repayment | Monthly EMIs, with a 1-month moratorium |
| Interest Rate | Starts from 11.20% onwards. If the loan amount is more than Rs. 2 lakhs, the applicant gets a concession of 0.50% on the interest rate. |
- PNB Mahila Udyami Scheme
The PNB Mahila Udyami scheme aims to empower and encourage women entrepreneurs to engage in manufacturing, trading, service and small businesses by offering them accessible and affordable loans. The Punjab National Bank provides this loan and is available at all its branches across the country.
Key Highlights:
| Eligibility | Applicable to all women borrowers who own at least a share of 50% in any business venturePreference is given to SC/ST and BPL cardholdersPreference is given to women trained by R-SETIs and any other state-run skill development organisationsMust not be a previous loan defaulter at any financial organisation |
| Loan Usage | To set up a new business unitFor expansion or modernisation of any existing unitFor acquiring fixed assets for the business |
| Nature of Loan Facility | Both term loans and overdraft facility available |
| Collateral | Not required as the loan amount is covered under CGTMSE |
| Loan Amount | Maximum of Rs. 10 lakhs |
| Loan Tenure | For term loans, 3 to 5 years with a maximum moratorium of 3 to 6 monthsFor overdraft loans, the tenure is 3 years, with the loan reviewed once every year |
- Mudra Yojana for Women
The Mudra Loan scheme has gained immense popularity in India, thanks to its relaxed eligibility criteria. Under this loan scheme, women entrepreneurs can avail loans to start a business unit.
Key Highlights:
| Eligibility | Available to women solo women entrepreneurs as well as a group of women to set up a business venture together |
| Loan Usage | To establish a small business unit |
| Nature of Loan Facility | Term loans |
| Loan Amount | Ranges from Rs. 50,000 to a maximum of Rs. 10 lakhsShishu loans are offered to businesses in their initial stages – maximum loan amount Rs. 50,000.Kishor loans are offered to businesses that are well-established for expansion. The loan amount ranges from Rs. 50,000 to Rs. 5 lakhs.Tarun loans are for well-established businesses and range from Rs. 5 lakhs to a maximum of Rs. 10 lakhs. |
| Collateral | Not required |
| Interest Rate | It varies from bank to bank |
Choose the Right Business Loan & Grow your Business Venture
All you women entrepreneurs out there, do not let the lack of funds put a full-stop to your business dreams. Give wings to your entrepreneurial ambitions with the right business loan. Compare interest rates, eligibility and other factors to choose the best business loan that fits your needs.
