5 Best Business Loans In India For Women Entrepreneurs

The data provided by the Ministry of Statistics and Programme Implementation compiled in the Sixth Economic Census, states that 14% of entrepreneurs in India are women entrepreneurs, which is equivalent to a whopping 8.05 million women entrepreneurs. This number has been increasing over the years and is expected to reach 30 million+ enterprises, which would be entirely owned by women, by the year 2030. This is expected to create an additional 150 to 170 million jobs in India. 

It is, therefore, necessary to motivate women entrepreneurs for the economic growth of the country as their participation is crucial for improving the overall standard of living and job creation. There are now various business loans options available exclusively for women entrepreneurs to help maintain their social independence and manage their business in a sound manner.

Let’s take a closer look at the best funding options available for businesswomen in India. 

5 Best Business Loan Options for Women Entrepreneurs

Here are the 5 best business loan options for women entrepreneurs which will help them tide over their financial needs.

1. Mudra Yojana Scheme for Women

This finance scheme was launched by the Government of India to lend support for new upcoming women entrepreneurs, who want to set up their own businesses. A major advantage of this scheme is that there is no need for collateral. Three sub-schemes are available under this scheme – namely, Shishu (loans up to Rs.50,000), Kishor (loans ranging from Rs.50,000 to Rs.5 lakhs), and Tarun (loans over Rs.10 lakhs).

Additional Reading: Benefits And Advantages Of MUDRA Yojana Loan

2. Sree Shakti Package For Women Entrepreneurs

Women need to hold 51% or more ownership in a business to be eligible for this loan scheme. The maximum loan which can be availed in this scheme is Rs. 50 lakhs. There is no collateral required if the loan amount is lesser than Rs.10 lakhs. Processing fee and loan tenure vary depending on the loan amount and related factors. Interest rate is 0.50% below base rate if loan amount > Rs. 2 lakhs, otherwise as per the Bank prescribed base rate. 

3. Shringaar and Annapurna from Bhartiya Mahila Bank

Bhartiya Mahila Bank also provides different loans for women entrepreneurs for setting up new or expanding their existing businesses. Two popular loans from the bank are Shringaar and Annapurna. 

4. Cent Kalyani Scheme

Central Bank of India, offers this loan scheme to women who are involved in trade, micro, small and medium enterprises (MSME), agriculture, retailing, cottage and village industries, etc. No processing fee is charged on the loan amount and the loan is provided to meet business day-to-day activities like working capital expenses etc. 

Women over 18 years are eligible for this scheme which has an upper limit of Rs. 100 lakhs. Interest charged starts from 7.40% and the loan tenure range between 1- 7 years. It is a collateral-free loan with no third party guarantee required, however, hypothecation of all stocks and assets generated from the loan provided is required as security.

5. Synd Mahila Shakti Scheme 

Canara Bank offers Synd Mahila Shakthi which is applicable for both new and existing women entrepreneurs. Women should own at least 50% of the financial holding to be eligible for this scheme. The scheme offers loans up to a maximum limit of Rs. 1 crore and no processing fee. 

The loan is available as either a cash credit to meet working capital requirements or a term loan with the maximum tenure being 10 years including the moratorium period. Interest is charged at 0.25% below the base rate for loans over Rs 10 lakhs, the base rate for below Rs. 10 lakhs.  Free credit card is provided and there is no requirement of a third-party guarantee for loans that come under CGTMSE.

Conclusion

Women entrepreneurs can now conduct their businesses in a hassle-free manner due to the easy availability of various loans under various Government and financial institution schemes. The top 5 loan schemes for women entrepreneurs have been discussed above which will help them deal with their financial contingencies and help them realise their dream of setting up successful business ventures.

FAQs

1. Where can I check my credit score before applying for a business loan for women entrepreneurs?

Women entrepreneurs can now check their credit rating for free via CreditMantri. Check your latest business credit score to evaluate your creditworthiness for availing loans at the best rates.

2. What are the loans available for women entrepreneurs to set up their business?

Various business loans are available for women entrepreneurs like MSME loan, small business loan, working capital loan, term loan, etc. Additionally, several banks offer special women-exclusive loan schemes. 

3.  How can a woman entrepreneur apply for a small business loan?

Women entrepreneurs can go to the official website of the Bank/Government institution or visit their office to complete the loan formalities.  Small Business Loans are provided by different Micro Finance Institutions, Regional Rural Banks, Co-operative Banks, etc. at affordable interest rates.

4. What are the various Government schemes available for Women Entrepreneurs?

Government offers women entrepreneurs the benefit of various loan options for setting up their business or scaling their existing businesses through their key loan schemes like Mudra Yojana, CGTMSE, Startup India, Standup India, etc.

5. Are digital schemes available for Women Entrepreneurs?

Yes, now digital schemes are available to women entrepreneurs.  This process is further made easy by various digital lending platforms where the entire loan process – right from application to disbursal of funds is performed online, saving time, money and energy. Also, there is the option of various loans of many lenders to choose from which offer flexible repayment terms, at competitive interest rates and minimal paperwork helping women entrepreneurs to pursue their entrepreneurial dreams.