Detailed Guide For Business Loans For Women In India
The contemporary Indian woman is stepping out of the four walls of the house and is making her mark in the start-up ecosystem. The ‘SHEROES’ are also seen leaving their high profile jobs and diving in the pool of entrepreneurship. These budding entrepreneurs want to turn their dreams into reality and the first step in starting a business is capital. For motivating women to become an entrepreneur, our government is coming up with many schemes that offer Small business loans for women in India.
Let’s start from the beginning:
COLLATERAL AND NON-COLLATERAL LOANS
Collateral loans or secured loans are backed with a value that you own, which may be your vehicle, property or gold etc. The lender places a lien on the collateral until you pay back the loan. If you do not pay back the loan, the lender may sell the collateral.
On the other hand, non-collateral loans are the loans where you borrow money without collateral. The interest rate is higher as the lender faces a higher level of risk without the collateral.
To provide a business loan without collateral and to help millions of entrepreneurs to start their business, the Ministry of Micro, Small and Medium Enterprises launched CGTMSE scheme. In order to apply for a loan under SIDBI and the Government of India’s CGTMSE i.e. Credit Guarantee Fund Trust for Micro and Small Enterprises, an entrepreneur needs to incorporate a Private Limited Company or LLP while also obtaining the necessary tax registrations and approvals. After that, conduct a market analysis and prepare a business plan reporting all the details of the business. Submit the business plan to the bank that provides a loan under the CGTMSE scheme and request for the sanction of loan. The bank will apply for CGTMSE scheme cover after the loan is sanctioned. On approval by the CGTMSE Organization, the loan will be granted and the borrower will have to pay the CGTMSE guarantee as well as a CGTMSE service fee.
(Also read 17+ Business Ideas for Women in 2018)
A Detailed Guide for Business Loans for Women Entrepreneurs in India
#1. Business Loan To Open Beauty Salon and Spa
Punjab National Bank and Bharatiya Mahila Bank introduced a special plan for women to establish their own beauty salon or spa. The loan covers all aspects including - construction, purchase, equipment and any other related tools for meeting day to day needs of the salon or spa. This business loan for women is available within the age group of 20 to 60 years under the CGTMSE scheme.
- Repayment within 7 years.
- Interest rate 12%.
#2. Business Loan For Women-Led Catering Business
State bank of Mysore and Bharatiya Mahila Bank designed a loan scheme for women to start food catering business. The loan is provided for selling Tiffin/lunch packs. This loan has easy eligibility criteria and is available under the CGTMSE scheme for women entrepreneurs between the ages of 18 to 60 years.
- Repayment within 3 years.
- Interest rate 11.5%.
#3. Business School For Women To Start Pre-School
Punjab National Bank and Bharatiya Mahila Bank also offer loan for setting up preschools or daycare centers. The loan covers construction, purchase, and buying required material. Women aged between 21 to 60 years can avail this loan under the CGTMSE scheme.
- Repayment within 5 years.
- Interest rate 12%.
#4. Loan for Women-Owned SMEs
For women-owned small and medium enterprises, Bharatiya Mahila Bank recommends SME easy loan. The loan is sanctioned for traders, service providers and manufactures under the CGTMSE scheme and the loan ranges from 1cr to 20cr.
- Tenure of 7 years.
- Interest rate 12.25%.
#5. Business Loan Against Property
For women entrepreneurs, Bharatiya Mahila Bank also proffers loan against property. The loan is available for women between the ages of 21 to 70 years. The loan ranges from a minimum amount of 5 Lakhs to 10cr depending on the type of business.
- Tenure of 7 years.
- Interest rate 12.75%.
#6. Shakti Project For Business Loan
Under the Stree Shakthi Package, State Bank of India and other associated banks provide Business loans for women in India. Small-scale units managed by women who have a stake of no less than 51% of equity are eligible. The interest is lowered by 0.5% for women without any collateral.
#7. Business Loan For Women In Agriculture and Manufacturing
For women entrepreneurs in the field of agriculture, manufacturing and other small businesses, who need financial assistance Dena bank operates a scheme called Dena Shakti. There is a 0.25% decrease in the interest rate along with the maximum amount of loan being 20 lakhs and 50,000 for education and housing.
#8. Business Loan For Women In Agriculture By PNB
To provide women entrepreneurs involved in agriculture and other small business with loans on flexible terms and nominal interest rates, Punjab and Sindh Bank offers a loan scheme called Udyogini. The loan is available for women between the ages of 18 to 45 years. The maximum amount of loan is 1lakh and it also takes your family income into consideration.
#9. Cent Kalyani scheme For Women Entrepreneurs
Cent Kalyani scheme operated by Central Bank of India supports women to start a new venture and to modify and expand the existing. This scheme requires no processing fee and no collateral and the maximum amount of loan that can be granted is 100 lakhs.
#10. Mudra Yojana Scheme For Women Entrepreneurs
The government launched the Mudra Yojana Scheme to help women to start new enterprises like a beauty parlor, tailoring units, and other small business. If the loan is granted, a Mudra card will be given to the borrower which functions in the same way as a credit card but the difference is that the funds available are limited to 10% of the loan granted.
#11. Orient Mahila Vikas Yojana For Women Entrepreneurs
Oriental Bank of Commerce launched a scheme called Orient Mahila Vikas Yojana which provides loans to women who hold a 51% share capital individually or jointly in a property. The amount of loan ranges from 10 lakhs to 25 lakh without any collateral required.
- Repayment within 7 years.
#12. Prime Minister’s Rozgar Yojana
Besides these supportive schemes that offer small business loans for women in India, there are many government schemes for MSMEs that provide special incentives as well as concessions for women entrepreneurs. Also, benefits and ease of women are duly considered under honorable Prime Minister’s Rozgar Yojana. MSME’s MSE Cluster Development Programme also work on the same premise, the contribution from the Ministry of MSME generally varies between 30-80% of the total project. However, in the case of women-owned businesses, MSME’s contribution could be up to 90%.
(Also Read - 7 Steps to Kickstart Your Business)
Apart from gaining all the knowledge required for starting or expanding a business, women also need to get inspired to do their best. Here are some successful women entrepreneurs who started from scratch but still made it big:
Successful Women Entrepreneurs who Started from Scratch
30 years ago she started an eatery through a mobile cart on Marine Beach with a team of just two people and now after years of hard work, dedication and passion she has 200 employees working for her in her restaurant ‘Sandeepha’. From the profit of 50 paise a day to 2 lakhs a day is a quite an example of her achievement and willpower.
With the aim to expand tribal legacy Pabiben Rabari became a true ambassador of colorful district Kutch. She started a Rabari women’s group that crafted styles of different embroidery and her website www.pabiben.com is now popular across the globe.
Thinlas Chorol from Ladakh was the only female trained to work in the mountaineering field. In the year 2009, she founded her travel company ‘Ladakhi Women’s Travel Company’ and the company became the first travel company completely owned and operated by women from staff to guide to trainees to porters.
Suchita Salwan- Tired of the people complaining about Delhi being a boring city Suchita started Little Black Book, Delhi site at an age of 22 years that discover every aspect of Delhi’s culture and happening life and soon enough the brand bagged the investment of 150,000 dollars and spread its wings across India.
Falguni Nayyar was an investment banker for 27 years since she started the e-commerce website ‘Nykaa’ the beauty and wellness e-store for women. Despite her long years of working experience, she struggled hard to retain her business but soon after so many disapprovals and falls her website bagged the investment of 9.5 million US dollars and today we all know ‘Nykaa’ is a women’s hub for beauty and makeup shopping.
P*****While there is still a long way to go for the gender inequality gap to be bridged in our country, the bank has been doing its bit in pushing for the same. Some schemes are designed keeping in mind the holistic empowerment and development of women in the country and the bank hopes that these schemes will work towards gender parity in the country: http://bit.ly/2MPr6rP
D*****Thank u for this
M*****Dear ma'am what will be the procedure for taking 2 crore loan for setting up a CNG station in Delhi ncr
T*****It's really useful information for women's some time we want to do something but don't have information about government scheme thanks for sharing
G*****Nice mam mujhe mil sakta h loan mera Tiffin service ka kam h
R*****It's too good for women who want to do some thing in her life I also want a loan for jewellery.Im a employee of Gvt.
S*****Yes, I want loan for a property
AnonymousYes i would like 2 get loan for my small business for garments n accessories hw n where do i get from n hw much time will it take
I*****I have triedexhibitions & many more thing but not able to raise funds even i have lost my initial capital.as you are telling about so many govt. Schemes are they only on papers how can be a women enterprenure be benefitied by these schemes
F*****@ish, in that case, you must try raising your own capital by setting up stalls at flea markets, malls, schools, etc. Advertise / share pamphlets in your locality for bulk orders - the festive season (diwali, weddings, etc) is about to set in. Just the right time to pitch in for corporate / personal bulk orders for gifting. :)
I*****I am running small chocolate business talked to many banks as want to expand my business but no one is ready to help
A*****But do not support bank
D*****Did you have any additional questions ?
D*****@Avni Sharma the process is literally what's in the blog dear.
A*****Please tell me the process
A*****I want to take loan for my own business
N*****I want to start a bussiness in foods and production or catering too .how can I start it. I'm a student with no income source I want capital to start my own business .how can I apply ??
N*****How to apply?
N*****How to aply
M*****Hey Kanika, how can entrepreneurs get access MSME ministry schemes? A few entrepreneurs say there's no proper contact websites etc.