India’s population demographic has immense potential for growth. In the next decade, the country will have the world’s largest pool of working-age people, with an estimated 1 billion working force. For this to translate into economic and social growth, an equivalent number of jobs need to be created.
Encouraging entrepreneurship may just be the perfect solution. It creates self-reliant opportunities while also increasing employment. Women-run SMEs encourage both equality and growth simultaneously. Reports indicate that women-owned businesses generate more employment when compared to male-owned ones, are more calculated risk-takers and are less likely to be overconfident. Women make powerful leaders and successful entrepreneurs, given their natural multitasking abilities and skilled reprioritisation.
Yet, at present, women entrepreneurs are much fewer when compared to male counterparts, comprising just about 20% of all entrepreneurs. This can be attributed to a number of reasons, such as cultural biases, the burden of domestic responsibility as well as financial impediments like access to credit.
According to a recent Google and Bain & Co study, providing support to female entrepreneurs can lead to the establishment of over 30 million women-owned enterprises, generating 150-170 million jobs. The Indian government and business community has already put in place certain funding options for women entrepreneurs.
If you are looking for funds as a female entrepreneur, here are the top five sources you can tap into:
1. Bhartiya Mahila Business Bank Loan
Bhartiya Mahila Bank, a subunit of State Bank of India, provides women with an SME business loan of up to Rs. 20 crores to set up their own manufacturing units or as working capital loans. Under the Credit Guarantee Fund Trust for Micro and Small enterprises, loans of up to Rs. 1 crore are sanctioned collateral free. Interest rates begin at 10% per annum and the maximum tenure of the loans are up to 7 years. First launched in 2013, this scheme creates a financial avenue for women to pursue their entrepreneurial goals.
2. Cent Kalyani Scheme
A loan from the Central Bank of India, women can avail the Cent Kalyani Scheme credit to set up their own SME in agriculture, cottage industry, manufacturing, trade or retail. The Cent Kalyani Scheme offers up to Rs. 1 crore to women for setting up a new business, expanding an existing one or as working capital loans. The loan is an unsecured business loan, that is, it is collateral free, with a maximum tenure of 7 years.
3. Dena Shakti Scheme
Launched by the Government of India under Dena Bank, the Dena Shakti Scheme sanctions loans of up to Rs. 20 lakhs for women in manufacturing, retail, agriculture or education businesses. The scheme also has a micro-credit option with a limit of Rs. 50,000. The scheme provides a 0.25% concession on market interest rates for women.
4. Mahila Udyam Nidhi (MUN) Scheme
The Small industrial Development Bank of India (SIDBI) issues financial assistance to women entrepreneurs at affordable interest rates under this scheme. The Mahila Udyam Nidhi scheme provides a woman up to Rs. 10 lakhs to establish their own small-scale business in manufacturing, production or services. An existing woman-owned business can also avail this loan to scale up. The loan is offered for a period of up to 10 years by a number of public-sector banks in India.
5. Stree Shakti Package for Women Entrepreneurs
This scheme is specifically for women entrepreneurs enrolled in their state’s Entrepreneurship Development Programme. EDP is an initiative by India’s Ministry of Skill Development and Entrepreneurship to hone business skills among first-generation entrepreneurs. Female business owners can take out a loan of up to Rs. 50 lakhs from the State Bank of India under this scheme.
While women can also apply for business loans under a number of other general SME business loan categories, such as the Mudra Yojana Scheme and Trade Related Entrepreneurship Assistance and Development (TREAD) scheme, these seven are specifically designed to meet your needs.
Financial impediments should never become a reason for unfulfilled dreams and potential. If the above government schemes do not meet your SME’s credit requirements, connect with CreditEnable for assistance in securing affordable finance. We are India’s largest SME credit marketplace and will help match you with the right lender and right product to suit your particular needs.