Business Loan

Business Loans for Women

25 Jun 2019 5 min read
Business Loan: Know Everything About Business loans For Women-Afinoz

Many of the funding schemes are offering comparatively lower interest rates in the range of 0.25% to 1%. Well, known banks like State Bank of India are establishing dedicated cells to inform women entrepreneurs about SBI business loan for women's eligibility and business loans for minorities.

Are you a modern woman ready to do all the hard work and get consistent income out of it? Then come out and be an entrepreneur. In modern India, entrepreneurship or start-up ventures are becoming increasingly popular day by day. Though the concept of entrepreneurship is not new, still you will find that very few women are coming out to become entrepreneurs.

To motivate the women in India, various leading financial institutions or nationalized banks are providing business loans for women. It is essential for the aspiring businesswomen to have adequate information about business loans for women in India provided by various funding institutions. However, due to lack of sufficient knowledge about loans for women’s to start a business, many women find it extremely difficult to start their own business. The nationalized banks of India have started many pleasant schemes to motivate the female entrepreneurs and also to promote entrepreneurship among women. It is a widely accepted fact that women are known to be more careful with business, and hence they are less likely to fail in a business endeavour. These cells are meant to provide training, consulting, counselling, and even channels for marketing or promoting their business products.

Business loans for women in India is not only helping women to start their own business but also is creating many job opportunities for women. These loans for women’s to start a business are also paving ways for economic independence as far as women are concerned.

Some of the most popular schemes related to business loans for women are discussed below-

  • Stree Shakthi Package:

These business loans for women in India are meant for those women who want to start their own small business and have 50% ownership in the proposed business. If you have pursued the Entrepreneurship Development Programmes or EDP conducted by different state-level agencies, then you are eligible to apply for this loan. These loans for women’s to start a business provide all assistance required to women entrepreneurs while setting up their businesses. For such loans that exceed Rs 2 lakhs, women entrepreneurs can get a concession on the rate of interest too (up to 0.50%).

  • Annapurna Scheme

For women entrepreneurs who have individual businesses or is engaged with partnership firms, these business loans for women will be of perfect help. As the name goes, the Annapurna scheme aims to offer financial support to the women entrepreneurs who want to start their own food catering business. You can get a loan of a maximum amount of Rs 50, 000 under these business loans for women in India. The maximum period of loan repayment is 36 months or 3 years with an additional one month of the moratorium period. With these loans for women’s to start a business, a woman can get working capital for purchasing kitchen utensils, equipment, water filters, and other such items required for a catering business. The rate of interest for these loans can be fixed as per prevailing market rates. Just like other loan procedure, a guarantor is needed for loan application under this scheme. Also, the woman entrepreneur has to submit some assets as collateral to the bank so that the bank gets some security.

  • Dena Shakti Scheme

The Dena Bank is offering the Dena Shakti Scheme for women entrepreneurs who want business loans for women to set up businesses in the manufacturing sector, agriculture, and other allied fields. These business loans for women in India also promote woman entrepreneurship to enable women to avail the much-needed financial support from banks. These loans for women’s to start a business can be availed at a concession on the interest rate of about 0.25%. This loan can also be utilized by women who already own retail stores, micro-credit stores, or even small enterprises.

  • Udyogini Scheme

The Udyogini scheme is an initiative taken up by the Punjab and Sind Bank for promoting female entrepreneurship. You can avail these business loans for women online, with easy terms and affordable rates of interests. These loans for women’s to start a business can be used by woman entrepreneurs for starting business enterprises or small scale industries and even agricultural set-ups. If you are a self-employed woman entrepreneur or a retail trader, you are eligible to apply for this business loans for minorities under this scheme.

  • Cent Kalyani Scheme

Cent Kalyani Scheme is a business loans for women in India provided to female entrepreneurs from the Central Bank of India for setting up new businesses. The Central Bank is offering financial assistance for experienced or new business owners, professionals or self-employed. You can apply for these business loans for women if you are owners of small scale industries, cottage industries, retail traders and even if you are engaged in agricultural and related businesses.

  • Mahila Udyam Nidhi Scheme

The MUN or Mahila Udyam Nidhi Scheme is meant for women entrepreneurs. These business loans for women in India come under Small Industries Development Bank of India. Under these loans for women’s to start a business, you can avail the maximum financial support that can extend up to Rs 10 lakh. The purpose of these business loans for minorities is to establish new industrial set-ups in the small scale sector.

  • Orient Mahila Vikas Yojana Scheme-

These business loans for women are introduced by the Government of India to promote female entrepreneurship. These business loans for women in India can be further explained in the following ways-

  • If you want business loans for minorities under this scheme, you must have minimum ownership of 51% in the business overall.
  • This scheme will offer loans for women’s to start a business with a 2% reduction in the rate of interest.
  • The tenure for the repayment of these business loans for women is up to 7 years.
  • You do not have to give any collateral if the loan amount exceeds Rs. 10 lakhs.

If the loan amount is up to Rs 25 lakhs in case of small scale industries or SSI, you are free from pledging collateral.

  • Mudra Yojana scheme for Women entrepreneurs-

These business loans for women in India have been introduced for those women entrepreneurs who wanted to start their business such as beauty salon, day care centre, or such other small business start-ups. Like all other schemes, these loans for women’s to start a business also aim to motivate a woman to start their own business and become an independent businesswoman. The various features of this scheme are explained here –

  • In this scheme, a loan amount starting from Rs 50,000 to Rs 50 lakhs can be availed by woman entrepreneurs.
  • For loan amount less than Rs 10 lakhs, you do not have to provide any collateral or guarantors to avail these business loans for minorities.
  • A woman can apply for these business loans for women in three different categories-
  1. Shishu Plan- These loans for women’s to start a business are meant for businesses at their starting stages. A loan amount up to Rs 50, 000 can be sanctioned in this plan.
  2. Kishor Plan- These business loans for women in India are meant for businesses that are well settled. However, in any case, if a woman entrepreneur requires money at any stage, then she can get a loan amount between Rs 50,000 to Rs 5 lakhs in this scheme.
  3. Tarun Plan- These business loans for women are meant for businesses that can be expanded. If a woman entrepreneur wants to expand her business, she can apply for these business loans for minorities, amounting up to Rs 50 lakhs.
  • Bharatiya Mahila Bank-

Bharatiya Mahila Bank was commenced as a bank to provide financial assistance to the underprivileged woman who dreams of starting their business ventures. Later, on 31st of March, 2017, this bank was amalgamated with the State Bank of India. The facilities provided by this bank can be discussed below-

  • For manufacturing enterprises, this bank sanctions business loans for women up to Rs 20 crores.
  • If you want to get a collateral free loan of amount up to Rs1 crore, then you can apply for this SBI business loan for women's eligibility through CGTSME (Credit Guarantee Fund Trust for Micro and Small Enterprises)
  • The tenure of repayment for these business loans for women in India is up to 7 years from the time of sanction.
  • The base rate of interest is 10.25% for these business loans for minorities. However, rates may differ in different cases.
  • Trade Related Entrepreneurship Assistance and Development scheme-

For the empowerment of woman in business fields, this scheme is initiated to assist with projects, to organize specific training or counseling and for gathering information on related needs. In these loans for women’s to start a business, you can avail a grant of up to 30% of the total project costs from the government as evaluated by the institutions.

  • Prime Minister’s Rozgar Yojana-

If you are a student, or unemployed woman or even an uneducated housewife, you can avail this scheme initiated by the Prime Minister to promote woman entrepreneurship among such woman. Instead of going for other loans that come with a high rate of interest, you can avail these business loans for women and can get a loan up to Rs 5 lakhs to start your own business. The maximum age limit for a woman to avail such loans for women’s to start a business is 45 years. You do not have to give any collateral for loan amounts up to Rs 1 lakh. You can also avail group financing of Rs 5 lakhs in these business loans for minorities.

  • Punjab National Bank Schemes for woman-

The Punjab National Bank has started many business loans for women in India for the financial empowerment of women. These schemes are-

  • PNB Mahila Udyam Nidhi Scheme that provides loans for women’s to start a business in the small scale sector.
  •  PNB Mahila Samridhi Yojana provides business loans for women for purchasing of required infrastructure.
  • PNB Mahila Sashaktikaran Abhiyan provides business loans for minorities for setting up of a project in the non-farm sector.

It’s beyond any doubt that these schemes, such as SBI business loan for women's eligibility are hugely encouraging the women entrepreneurs. Yet, many of them are still lagging in utilizing the advantages offered by these business loans for women. This is happening because many women are not quite aware of these loans for women’s to start a business and their exclusive features. Various groups are coming out to help the rural and deprived women in getting these women-centric loan schemes. But a lot of work are still to be done by NGOs, microfinance-institutions, government machinery and self-help groups to bring these schemes closer to the female entrepreneurs, particularly in the rural areas.

Comparison table of some of the government schemes available-

Criteria for comparison

Synd Mahila Shakthi

Shakti Scheme

Shringaar or  Annapurna

Stree Shakti

Cent Kalyani

Bank associated

Syndicate Bank

Dena Bank

Bhartiya Mahila Bank

SBI and Associates)

CBI

Eligibility criteria

The woman should have sufficient knowledge or experience in the field of business.

 

It is applicable for women who have less than 50% ownership in a business firm.

 

For Shringaar, the woman should be between 20 to 60 years in age; for Annapurna, she should be between 18 to 60 years.

 

The woman should own about 51% of the enterprise.

 

For women over 18 years of age and has no source of income.

Maximum amount of loan

Loan amount is up to Rs 5 crore

Loan amount of Rs 50,000 for micro-credit schemes; amount up to Rs20 lakhs for education, retail trade and housing.

Loan amount up to Rs 50,000 for Annapurna/food; for shringaar, loans up to Rs10 lakhs will be provided

 

Loan amount is up to Rs 50 lakhs

Loan amount is up to Rs 100 lakhs

Period of loan

Maximum loan period of 10 years including the moratorium period

May be different for different loan amount and such criteria

 

Loan term is 7 years for Shringaar and 3 years for Annapurna

May be different for different loan amount and such other factors

 

For a period of 1 year to 7 years

Rate of interest

For loan amount that exceeds Rs 10 lakhs, the base rate is below 0.25%. In other cases, the interest rate is as per the base rate of the bank

 

For women entrepreneurs having majority stakes in the company, the

base rates are below 0.25% 

In addition to the base rate, an additional 2% for Shringaar and 1.5 % for Annapurna

 

For loan amount that exceeds Rs2 lakhs, the base rate is below 0.50%. In other cases, the interest rate is as per the base rate of the bank

 

Base rate and 0.25% interest rate for loans up to Rs 10 lakhs. For loans above this, the interest rate is 0.50% in addition to the base rate and tenure premium as per applicable.

 

Processing Fee

No processing fee

May be different for different loan amount

May be different for different loan amount

May be different for different loan amount

 

No processing fee

Other added Features

You can get a free credit card.

There is no need of any third party guarantee under CGMSE

Apart from enterprises operating in agriculture and related sectors, some micro-credit stores and retail stores can also avail this scheme.

 

Shringaar has tie up with companies like Cavin Care or Naturals etc.

Both the Shringaar and Annapurna scheme are free from collateral and comes   under CGTMSE

For loans up to Rs 5 lakhs, no requirement of security.

No interest concession for retail traders who are provided with advances

No third party guarantee or collateral is required

As a security, assets created from bank’s fund and Hypothecation of all stocks is necessar

 

The footnote:

As a woman entrepreneur, now it’s up to you to decide the best financial assistance for yourself. You should come up to avail full benefits provided under these business loans for women.

The effective online platform of Afinoz can help you in getting business loans for women in India or business loans for minorities, as per your unique need and affordability. Afinoz has digitalized and simplified the entire financial processes related to SBI business loan for women's eligibility, and loans for women have to start a business. Afinoz facilitates the disbursal of all business loans for women in a quick, reliable, transparent manner.