As more women entrepreneurs step into the business world, their demand for business loans has surged significantly. Both government-backed and private lenders offer various business loan options tailored to the specific needs of women entrepreneurs. These loans often come with benefits such as fast approvals, flexible terms, and minimal documentation requirements.
However, these benefits may vary depending on the lender. Small business loans for women can provide access to lower interest rates, enabling profits to be reinvested back into the business to facilitate growth.
The government has implemented several loan schemes to support women entrepreneurs and boost the economy. Here are some programs you may consider.
Mudra Loan Scheme for Women
The Government of India introduced the Pradhan Mantri Mudra Yojana (PMMY) to encourage women, especially young entrepreneurs, to start their businesses. Under this scheme, loans can be availed based on the business’s stage:
- Shishu: Loans of up to ₹50,000.
- Kishor: Loans ranging between ₹50,000 and ₹5 lakhs.
- Tarun: Loans ranging between ₹5 lakhs and ₹10 lakhs.
The Shishu and Kishor categories emphasize encouraging entrepreneurship in younger individuals, while Tarun is intended for more established ventures.
Mudra loans can be obtained from any bank. You can either apply online (if offered by the bank) or visit the branch to submit the required documents offline. Banks adhere to RBI guidelines when setting the interest rates for Mudra loans.
Additionally, a Mudra debit card can be issued against Mudra loan accounts to cover working capital needs. These cards allow cash withdrawals at ATMs across India and can be used for purchases at point-of-sale machines.
Cent-Kalyani Scheme
The Cent-Kalyani Scheme, introduced by the Central Bank of India, supports women entrepreneurs in growing their businesses. This scheme can be used to meet day-to-day expenses or working capital needs.
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Key benefits include:
- No collateral or third-party guarantee is required.
- Flexible interest rates based on the loan amount.
Interest Rates:
- For loans up to ₹10 lakhs: MCLR + 0.25%.
- For loans between ₹10 lakhs and ₹1 crore: MCLR + 0.50%.
This business loan is available to women entrepreneurs engaged in various sectors such as manufacturing, services, and professions like handloom weaving, food processing, garment making, healthcare, and more. It provides a crucial financial boost to support the growth of their businesses. The loan is also suitable for small companies like mobile restaurants, tailoring services, daycare centers, and other entrepreneurial ventures. By availing this business loan, women can access the necessary funds to scale their operations, meet working capital requirements, and expand their business activities, contributing to their overall success and economic empowerment.
Stand Up India
The Stand Up India scheme aims to support women entrepreneurs and individuals from SC/ST communities. Each bank branch must provide at least one loan ranging from ₹10 lakhs to ₹1 crore.
Key Features:
- Interest rate: MCLR + 3% + Tenor Premium (based on the loan tenure).
- Repayment period: Up to seven years, with a maximum moratorium of 18 months.
- Eligibility: Applicants must be 18 years or older and launching a greenfield project in agriculture, manufacturing, trading, or services.
To qualify, the applicant must hold a majority stake (51% or more) in the enterprise. Additionally, a 10% contribution from the applicant is required before the loan covers the remaining project costs.
PNB Mahila Udyami Scheme
Punjab National Bank offers the PNB Mahila Udyami Scheme, which provides financial support to small and medium-scale businesses led by women. Loans under this scheme can be used for day-to-day operations and equipment investments.
Key Features:
- Maximum loan amount: ₹10 lakhs.
- Repayment period: 3–5 years.
- No collateral is required.
- Priority is given to SC/ST/BPL women.
To be eligible, women must own at least 50% of the enterprise. Applicants must not have availed themselves of loans under other government schemes and should have a clean credit history.
Conclusion
Women entrepreneurs have numerous options to finance their businesses, ranging from government programs to loans offered by private banks, NBFCs, and small finance banks. These loans are designed to encourage women to start and sustain their businesses by providing flexible terms, minimal documentation, and affordable interest rates.
With schemes like the Mudra Loan, Cent-Kalyani, and Stand Up India, women can access the financial support they need to grow their enterprises. By leveraging these resources, women can not only meet their working capital needs but also expand their businesses, create job opportunities, and contribute to economic growth.
Whether it’s for working capital, expansion, or equipment investment, women entrepreneurs have ample opportunities to achieve their business goals. Access to finance is a critical factor in ensuring the success of women-led businesses, and these loan schemes help level the playing field, fostering a more inclusive entrepreneurial ecosystem.