Business Funding Options for Women Entrepreneurs
In the last few years, women have been seen leaving their jobs and starting their own ventures, the same is true with several housewives as well as they are stepping out of the four walls of their homes and starting their own small ventures in India.
But, to start a new venture the most important prerequisite is the availability of capital. If capital or funds are made available most of the women would like to start something of their own.
Considering this there are various banks which provide specialized loans for women entrepreneurs. Even our government has launched various funding schemes for women to encourage and support them. These schemes & loans have a slightly different and more flexible set of terms and conditions for women entrepreneurs in terms of collateral security, interest rates, etc.
Schemes and Small Business Loans for Women Entrepreneurs in India
1. Public Sector Bank Loans (PSB)
Public sector nationalized banks offer specially designed business loans, especially for the women to encourage entrepreneurship among them.
Benefit – Relaxed interest rates as compared to other business loan offered to the general borrowers.
PSBs that offer small business loans to women entrepreneurs.
- Bank of India
- Bank of Baroda
- Bank of Maharashtra
- Central Bank of India
- Indian Overseas Bank
- Punjab & Sind Bank
- State Bank of India
- UCO Bank
2. Private Sector Bank Loans
Private sector banks also offer loans to women to support & empower them who are having a proper plan to start a business or who are already running a business but needs funds to expand or maintain the cash flow.
Benefit – With private sector banks loan for women higher quantum of loan is available. But the side which over shades it is the higher rate of interest.
Private sector banks offer small business loans to women entrepreneurs.
- Axis Bank.
- Development Credit Bank (DCB Bank Ltd)
- HDFC Bank.
- ICICI Bank.
- IndusInd Bank.
- Kotak Mahindra Bank.
- Yes Bank.
3. Government Schemes (central/state)
In the last few years, the government of India has started many schemes for women to help them start their own small businesses which can help them to become independent. These schemes support women empowerment and provide loans to women from small to large scale without much hassle. The eligibility required to get approved for these schemes is minimal but there is a high competition among the loan seekers to get approved for it.
- Relaxed eligibility criteria.
- Low-Interest rate.
- No collateral required.
- Interest may be wiped out in many cases.
4. Funds from NGOs and other funding bodies
There are various NGOs and funding organizations which offers small business loans to women. These NGOs and funding bodies work in groups and provides small loans to women to start small ventures such as tailoring, tiffin service, and cattle farming, to set up pickle and papad business where 5-10 women are working.
Availing funds from these NGOs and funding bodies is best when one needs a small loan amount that too for small ventures. Funds from these bodies are easily available.
Government Schemes for Women Entrepreneurs
1. Annapurna Scheme
This Scheme is offered by the State Bank of Mysore for those ladies who are willing to set up catering & tiffin services to sell meals, snacks, and eatables.
The sum allotted through this scheme can be utilized to satisfy the working capital needs of the professional purchasing utensils and other kitchen devices and gear.
2. Bharatiya Mahila Bank Business Loan
This loan is a supportive measure for sprouting ladies who are aimed to begin new pursuits in the fields of the retail segment, credit against property, MICRO advances, and SME advances.
The maximum loan amount which can be granted under this can go up to ₹20 crores if there is an occurrence of assembling enterprises and furthermore a concession is accessible to the degree of 0.25% on the loan cost and financing costs more often than not run from 10.15% and higher.
Furthermore, under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), there is no necessity of insurance security in the form of collateral or security for a loan of up to ₹1 crore.
3. Udyogini Scheme
The maximum loan amount available under this scheme for women between the age brackets of 18-45 years is ₹1 lakhs but to get this the family income of the borrower is also considered.
Udyogini scheme is by Punjab and Sind Bank to provide funds to the women entrepreneurs of Agriculture, retail and small business enterprises. This scheme offers loans at flexible terms and concessional interest rates.
There are no scarcity of funding options, if there is a proper business plan to justify the amount being borrowed. From the government to the private sector banks, there are a variety of options available.