The MSME ecosystem in India is an overflowing well of innovative ideas and creative solutions to a number of problems. But the number of women entrepreneurs and business owners is much lower than male entrepreneurs.
Only 13.76 percent of the total entrepreneurs in India are women, according to data by Startup India. There are just around 8 million female entrepreneurs, but the number of male entrepreneurs has crossed 50 million.
Governments at the central and state levels have launched financial schemes for micro units, which could go a long way in boosting women entrepreneurship. Read on to find out more about these financial schemes.
This general government scheme for small units is also applicable to women who want to start a small enterprise such as a beauty parlour, tuition center, tailoring unit, etc. It is also useful for a group of women who want to startup together. Loans from Rs 50,000 onwards and upto Rs 50 lakh are sanctioned under this scheme. Collateral and guarantors are required only if the loan amount exceeds Rs 10 lakh.
There are three plans under this: Shishu plan (loans upto Rs 50,000 for new businesses), Kishor plan (loans between Rs 50,000 and Rs 5 lakh for well-established enterprises), and Tarun plan (loans between Rs 5 lakh and Rs 10 lakh for business expansion).
This scheme aims to empower women by providing credit to projects, conducting specific training and counselling, and eliciting information on related needs. The scheme provides for a government grant of upto 30 percent of the total project cost as appraised by lending institutions. These institutions would finance the other 70 percent.
Offered by Small Industries Development Bank of India (SIDBI), this scheme provides financial assistance of up to Rs 10 lakh to set up a new small-scale venture. It also assists with upgrading and modernisation of existing projects. The loans are to be repaid within 10 years, and this includes a five year moratorium period. Further, interest rates on these loans can vary according to market rates.
This scheme applies to women entrepreneurs who have started a food catering unit. They can avail a loan of up to Rs 50,000 to purchase kitchen equipment such as utensils and water filters. A guarantor is required to secure the loan. After securing the loan, it can be repaid in 36 installments. Further, interest rates under this scheme as per prevailing rates and assets will be taken as collateral by the concerned bank.
It is offered to women who have majority ownership (over 50 percent) in a small business. The women also need to be enrolled in the Entrepreneurship Development Programmes (EDP) organised by their respective state agency. Under the scheme, an interest concession of 0.05 percent can be availed on loans above Rs 2 lakh.
This scheme involves a loan of upto Rs 20 crore for women business owners of manufacturing enterprises. Under the Credit Guarantee Fund Trust for Micro and Small Enterprises, there is no need for collateral for loans up to Rs 1 crore. The loans under this bank loan scheme are to be repaid in seven years. The scheme was implemented by Bhartiya Mahila Bank which was merged with State Bank of India in 2017.
This scheme provides loans up to Rs 20 lakh for women entrepreneurs in agriculture, manufacturing, micro-credit, retail stores, or similar small enterprises. There is a concession of 0.25 percent on rate of interest. Under the scheme, loans up to Rs 50,000 are offered under the microcredit category.
Women entrepreneurs between the ages of 18 and 45, who are involved in agriculture, retail and similar small businesses, can avail loans up to Rs 1 lakh under this scheme. Further, her family’s annual income should be below Rs 45,000 in order to avail the loan. However, no income limit exists for widowed, destitute or disabled women. For widowed, destitute or disabled women from SC/ST categories, a subsidy of 30 percent of the loan, up to Rs 10,000, is provided.
Offered by the Central Bank of India, this scheme is for women business owners in multiple areas such as agricultural work or retail trading. Under this scheme, loans up to Rs 1 crore are sanctioned and no collateral or guarantors are required. Interest rates on loans depend on varying market rates.
(We will update this Resource Centre periodically)