Women in India are increasingly keen on joining the entrepreneurial force and setting up their business ventures. For all women who aspire to gain financial freedom by launching their businesses and taking on the role of entrepreneurs, financing is the first and most significant challenge. Fortunately, the government of India has recognised this issue and has, over the years, launched several schemes that offer business loans for women at favourable terms.
So, aspiring women entrepreneurs in India looking for government loan schemes for ladies have a wide range of options to choose from. If you belong to this category (or know someone who does), all you need to do is compare the various government loan schemes for women entrepreneurs offered in India, determine your business loan eligibility for these schemes and choose the credit facility that best aligns with your ambitions.
To make an informed choice, it’s essential to first be aware of the different government loan schemes for housewives and women entrepreneurs launched by the Indian government. Let’s begin by taking a closer look at the top loan schemes empowering women for several years now.
List of Government Loan Schemes For Women Entrepreneurs
Here is a list of the top government loan schemes for women in India. If you are a woman looking for financing to establish a business or achieve your financial goals, the following government loan schemes for ladies can help you.
- Mudra Loan for Women
- Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme
- Stree Shakti Yojana
- Mahila Udyam Nidhi Yojana
- Udyogini Scheme
- PM Vishwakarma Kaushal Samman
- New Swarnima Loan Scheme
- Stand-Up India Scheme
- Mahila Coir Yojana
- Udyam Sakhi Portal
Women Empowerment Government Schemes
Let us take a closer look at what each of these Indian government schemes for women entrepreneurs and applicants entails and how they can benefit women across the country.
1. Mudra Loan for Women
Launched on April 08, 2015, the Pradhan Mantri Mudra Yojana (PMMY) is a credit facility scheme aimed at providing capital to micro and small businesses. Empowerment of women entrepreneurs is one of the primary objectives of the loan scheme; and to that effect, the scheme provides a concession of about 0.25% on the Mudra loan interest rate for women borrowers.
Women entrepreneurs can avail of a Mudra loan under any of the following three categories – Shishu, Kishore and Tarun. Under Shishu loans, borrowers are eligible to obtain a loan of up to ₹50,000, whereas with Kishore loans, borrowers may get loans ranging from ₹50,001 to ₹5 lakhs. Under Tarun loans, women entrepreneurs can get a loan of above ₹5 lakhs to up to ₹10 lakhs.
2. Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme
TREAD is another government scheme aimed at encouraging business loans for women. The scheme was introduced in the financial year 2014 – 2015 and was in operation until September 2017.
Under the scheme, up to 30% of the loan amount, subject to a maximum of ₹30 lakhs, was provided by the Government of India. The remaining 70% of the loan amount was provided by the lending institution.
The loan amount was disbursed through eligible Non-Governmental Organisations (NGOs) that were engaged in assisting budding women entrepreneurs in the non-farm sector. Eligible women borrowers would receive the required loan amount from the NGOs and use the same to establish or further their business.
3. Stree Shakti Yojana
Launched during the financial year 2000 – 2001, the Stree Shakti Yojana is a government loan scheme for women aimed at making the rural women of Karnataka self-reliant. The scheme is entirely funded by the State Government of Karnataka and provides a plethora of benefits ranging from revolving funds to bank loans with an interest subsidy of up to 6%.
In addition to these benefits, the Stree Shakti Yojana also provides incentives for groups with excess savings and those involved in income-generating activities. The scheme also provides training to women at different levels, direct and online marketing of products made by the Stree Shakti groups and conducts annual melas and exhibitions.
Stree Shakti groups and Stree Shakti block societies that perform well are felicitated and presented with awards to encourage and motivate them.
4. Mahila Udyam Nidhi Yojana
The Mahila Udyam Nidhi Yojana was launched in the financial year of 1987 – 1988 by the Small Industrial Development Bank of India (SIDBI). The primary objective of the scheme was to kindle the entrepreneurial spirit in women by providing working capital loans and term loans at concessional rates of interest. The funds were disbursed to eligible borrowers via Punjab National Bank (PNB).
To qualify for a loan under the Mahila Udyam Nidhi Yojana, women entrepreneurs must satisfy the stipulated business loan eligibility criteria, which mandates that women applicants must own at least 51% of the business.
The maximum amount of loan that can be availed under the scheme is ₹10 lakhs, whereas the maximum tenure can only be up to 10 years with a moratorium period of up to 5 years. Unlike traditional options, the Mahila Udyam Nidhi Yojana doesn’t require any collateral to avail of a loan, making it easy for women to gain access to capital.
5. Udyogini Scheme
Sponsored by the State of Karnataka, Udyogini is a govt. loan scheme for ladies that was launched during the year 1997 – 1998. A few years after the launch, the scheme was subsequently modified during the financial year of 2004 – 2005. Eligible women borrowers who satisfy the specified criteria can get loans at subsidised rates from the Karnataka State Women’s Development Corporations.
The loans are disbursed through Scheduled Commercial Banks, Regional Rural Banks (RRBs) and district cooperative banks. Women from Scheduled Castes (SC) and Scheduled Tribes (ST) can avail of loans ranging from ₹1 lakh to ₹3 lakhs with a subsidy of up to 50% of the loan amount.
Women from general and special categories, meanwhile, can also get loans of up to ₹3 lakhs but with a subsidy of only up to 30%, subject to a maximum of ₹90,000.
6. PM Vishwakarma Kaushal Samman
The PM Vishwakarma Kaushal Samman (PM VIKAS) is a financial assistance package aimed at uplifting traditional artisans and craftspeople, commonly referred to as Vishwakarma. Women Vishwakarma can also obtain loans under this scheme to enhance the quality, scale, and market reach of their products.
Implemented by the Ministry of Micro, Small and Medium Enterprises, the PM Vishwakarma Kaushal Samman helps preserve and promote India’s traditional art forms while ensuring the prosperity and well-being of its artisans.
By providing timely financial assistance, the PM VIKAS scheme aims to integrate women artisans and craftspeople into the MSME value chain. In addition to credit facilities, the scheme also provides advanced skill training in modern digital techniques and green technologies, brand promotion and digital payments, among others.
7. New Swarnima Loan Scheme
One of the lesser-known government schemes for women entrepreneurs is the New Swarnima Loan Scheme. It is a relatively new scheme that was launched on December 19, 2023, and is implemented by the National Backward Classes Finance and Development Corporation (NBCFDC).
As per the terms of the scheme, women from notified backward classes with an annual family income of less than ₹3 lakhs are eligible to apply for term loans. The maximum amount of loan that can be availed under the New Swarnima Loan Scheme is capped at ₹2 lakhs with NBCFDC providing 95% of the loan amount and the notified channel partner contributing the remaining 5%.
The rate of interest on term loans availed under the scheme is just 5% per annum, which is far lower compared to many other government loan schemes for women. The repayment of the loan must be made every quarter for a maximum tenure of up to 8 years.
8. Stand-Up India Scheme
The Stand-Up India Scheme is spearheaded by the Department of Financial Services (DFS) under the Ministry of Finance. The primary objective of this financial assistance scheme is to encourage new entrepreneurs from the marginalised sections of society, specifically women and Scheduled Castes (SC) and Scheduled Tribes (ST).
Under this government loan scheme for housewives and working women, borrowers can avail of term loans or working capital loans ranging from ₹1 lakh to ₹1 crore for setting up greenfield enterprises. These enterprises must be spearheaded by at least one woman borrower and one borrower from the Scheduled Castes or Scheduled Tribes.
The maximum amount of loan that borrowers are eligible for is capped at 75% of the total project cost. As far as the interest rates are concerned, the maximum rate is capped at 3% over the base rate (MCLR). Borrowers are eligible for an 18-month moratorium and may opt for a maximum tenure of 7 years.
9. Mahila Coir Yojana
A government loan scheme for women, the Mahila Coir Yojana aims to empower rural women in the coir industry by providing them with self-employment opportunities. The scheme is implemented as part of the Coir Vikas Yojana of the Coir Board of India.
The Mahila Coir Yojana primarily focuses on regions that produce coir fibre, which includes states like Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, among others. The scheme emphasises the conversion of coir fibre into usable yarn through motorised ratts. Women entrepreneurs wanting to benefit from the scheme must first complete a training program in spinning coir yarn at Coir Board training centres.
Eligible borrowers may apply for financial assistance to the tune of ₹25 lakhs for the setting up of a coir spinning unit and procurement of equipment and machines for the conversion of coir fibre into usable yarn.
10. Udyam Sakhi Portal
An initiative from the Ministry of Micro, Small & Medium Enterprises, the Udyam Sakhi portal was launched in 2018 to foster a network of women entrepreneurs. The scheme provides comprehensive support and resources to help women start, build and grow their businesses.
In addition to encouraging women entrepreneurs, Udyam Sakhi also offers finance schemes for small businesses by the Ministry of MSME and banking institutions, assistance, counselling and a range of services.
The list of services includes information on schemes and policies, entrepreneurship learning tools, incubation facilities, training programs for fundraising, mentorship opportunities, investor meet-ups, market survey facilities and learning and development initiatives.
Through a multifaceted approach, Udyam Sakhi aims to empower Indian women to overcome challenges, seize opportunities, and thrive in the business landscape.
Challenges Faced by Women Entrepreneurs In India
Women entrepreneurs often face a plethora of different challenges; some are very similar to the challenges faced by their male counterparts, whereas others are entirely different. Here’s a quick overview of some of the key challenges.
1. Lack of Access to Funds
One of the primary challenges that women entrepreneurs face is the lack of adequate funds for starting a business. Compared to their male counterparts, women often find it incredibly difficult to secure capital. A major reason for this situation is the lack of assets that can be pledged as collateral to secure loans.
2. Lack of Education
The literacy rate among women is significantly lower than that of men. Additionally, many women either don’t get any kind of formal education or are prevented from completing their education. However, the literacy rate and enrolment of women and girl children in formal education have been steadily growing thanks to a plethora of state and union government measures.
3. Familial Responsibilities
In Indian households, women are expected to handle familial responsibilities in addition to their careers. The constant back and forth with work and family responsibilities and the physical and emotional pressure associated with it often prevent women from achieving their true potential.
4. Low-Risk Appetite
Women generally refrain from taking on too much risk, which is often necessary to succeed in business. This can be a huge limiting factor that can prevent women entrepreneurs from reaching great heights.
5. Lack of Networking Skills
Networking with other individuals and business owners is crucial for long-term viability and success. However, many women entrepreneurs struggle with establishing connections and relationships, which limits the growth and development of their businesses. Thankfully, women entrepreneurs can easily overcome this limitation by attending networking events.
Also Read: Five Key Challenges Faced by India’s Women Entrepreneurs
How Can a Woman Apply for a Small Business Loan?
If you’re a woman who is interested in starting your own business, you can quickly apply for a small business loan by simply following the step-by-step process outlined below.
- Step 1: Select the right lending institution. Remember to compare loan offers from different lenders to determine the one that fits your requirements.
- Step 2: Ensure that you meet the eligibility criteria as required by the lending institution.
- Step 3: Visit the official website or a branch of the financial institution.
- Step 4: Fill out and submit a loan application along with all the necessary documentary evidence.
Once your application is received, the lending institution will scrutinise and verify the provided details. If they’re satisfied, your loan will be approved and the funds disbursed to your bank account.
Conclusion
A closer examination of the government loan schemes for women outlined above shows us that the Indian government has been committed to empowering ambitious women for many decades now. If you or someone you know is a woman seeking financial independence, these government loan schemes for housewives and women entrepreneurs can be pivotal in achieving such goals.
To take the first step towards fulfilling your entrepreneurial dreams, all you need to do is compare the government loan schemes for ladies listed above, check your eligibility and choose the scheme that offers you the most benefits. Then, simply apply for the scheme as per the due process and utilise the funds received to make your ambitions a reality.
Frequently Asked Questions
- Is there any loan for women to start a business?
Yes, women in India can rely on the various government loan schemes for ladies to start and expand their own business ventures. In addition to this, various private and public sector banks also extend loans to women with entrepreneurial goals.
- What loan options are there to start a small business for women?
Women in India keen on starting a small business can choose from various government loan schemes for women. Some options include Mudra loans for women and credit facilities offered by the Trade Related Entrepreneurship Assistance and Development (TREAD) scheme, Stand-Up India scheme, Mahila Udyam Nidhi scheme and more.
- How can a woman apply for a small business loan?
All that women need to do to apply for a small business loan is visit the official website or a branch of the financial institution. Then, fill out and submit the loan application along with all the necessary documentary evidence. After successful scrutiny and verification, the lender will approve your loan application and disburse the funds directly into your account.
