Business Loan Options for Women Entrepreneurs in India

Nowadays, women like to be at the forefront in any field. Women are at par with men and do not like to follow orders given by them, whether at home or office. Women possess the necessary skills, aggression and risk-taking attitude required to become successful entrepreneurs. Gone are the days when Indian women were considered a meek doormat. In fact, nowadays even men get intimidated with women who know how to lead rather than follow orders. 

Any new venture requires capital. Despite having all the knowledge and skills to lead the bandwagon, lack of monetary resources is the reason why most women stop in their tracks when it comes to taking up the entrepreneurial role. Be it setting up a small-scale business like a salon or spa, or creating a start-up company that provides marketing services, finding an appropriate sponsor to fund the business needs is a real challenge. Overcoming this challenge is the first step toward implementing a new business plan.

Available Credit Options

Here are some of the credit options that you can bank upon to start your own business:

• Term Loans

If you are aiming to create a start-up company, you can opt for terms loans. Terms loans fulfill your initial needs such as setting up an office for your company or acquiring fixed assets such as equipment, machinery, and tools.

• Corporate Term Loans

If you are aiming to start a new business or scale up an existing one to a much wider level, even globally, you can go for corporate term loans that offer a huge capital for your wide-ranging business needs.

• Working Capital Loans

In order to fulfill your variable expenses, you can opt for working capital loans with affordable interest rates.

[To all the women who wish to start their business and work from home. Here, is our article which will guide you by providing various Trending home-based small business ideas for women]

Loan Schemes for Women

There is a rise in the number of women aiming to become entrepreneurs, the Government of India has offered many loan schemes for women. As a woman aiming to be independent, you can take advantage of these schemes for women to create a start-up business of your dreams:

• Stree Shakti

The business which is operated by women can receive the Stree Shakti package. The State Bank of Mysore offers an attractive credit to women entrepreneurs - up to 50 lakhs, the only requirement being that you need to own half of the business you want to be financed. You don't have to submit any collateral, and the interest rate is reduced by 0.5% for women.

• Annapurna Scheme

As the name says, the Annapurna scheme, offered by the State Bank of Mysore as well as the Bhartiya Mahila Bank, is for women aiming to start a food-related business. It can be a small tiffin service or a much bigger catering business. You can avail of a loan of up to Rs. 50,000 and need to have collaterals and a guarantor as security. The interest rates are variable, and the loan repayment period is 3 years.

• Mudra Yojana Scheme

This Mudra Yojana scheme for women is meant for women who aim to start any other small business. You don't need to submit collateral security. Three types of plans are offered for businesses under different stages. These are Shishu Plan (for initial stages like business setup), Kishor Plan (for established businesses) and Tarun Plan (for business scale up and expansion). Loans are ranging from Rs. 50,000 to Rs. 50 lakhs can be availed under this scheme. You are given a "Mudra card," which is similar to a credit card, once the loan is sanctioned.

[Pradhan Mantri Mudra Yojana (PMMY) Scheme act as financial assistance to your Business. To know more about the Eligibility Criteria, Required Documents and Application Process, refer to our blog on  How to get Pradhan Mantri Mudra Yojana (PMMY) Loan?]

• Udyogini Scheme

This is an attractive loan scheme for women offered by the Punjab and Sind Bank because of its low-interest rates on loans and flexible terms. This scheme is mainly for women aiming to start up small businesses in segments such as retail and agriculture. The upper limit offered on loan is Rs. 1 lakh. You need to have at least a family income of Rs. 45,000 to avail of the loan under this scheme. Even disabled women, widows and women belonging to the SC/ST category can take advantage of this scheme.

Success Story

Dr. Kiran Mazumdar-Shaw is a successful Indian Woman Entrepreneur, who had the courage to dream big when she founded Biocon with initial funding of just Rs. 10,000. Creditors were skeptical of her venture and were reluctant to grant her loan. Biotechnology was an unknown name in India, which was later popularized and accepted worldwide. If she could do it, you can too!

Having a good vision about market conditions and whether your business is likely to thrive or suffer in such conditions is an essential quality of a successful entrepreneur. Merely having an MBA degree from a top-notch B school isn't enough. But, having a practical know-how of business models and an adaptive mindset to change directions quickly is necessary not just to make your business survive under harsh conditions but flourish too.

No matter how progressive Indian women look, the traditional Indian mindset prevents creditors to trust them, and so they hesitate to extend a very high credit. Factors such as a good credit score, rate of progress of the business and the ability to repay the loan amount are taken into account while extending the loan for women entrepreneurs in India. As a self-starter woman, you should go for a creditor that offers low-interest rates and flexible repayment options.

So women, if you don't want to be a submissive doormat and want to be a free bird, get up and don the hat of an entrepreneur. Don't let lack of moolah stop you from achieving your dreams. Be your own boss! Any queries related to the above-given loans and schemes, please feel free to approach us by filling the form given below.