Entrepreneurship ventures are definitely not a new concept in India, however, in an age where a range of benefits are offered to start-ups, women entrepreneurs are still a distinct minority. In order to spur further growth of entrepreneurial initiative among women, leading financial institutions in India, including nationalized banks, have introduced various loan schemes that cater to this emerging segment. To make such loans attractive for women, key features of these loans include lower interest rates, low to zero processing fees, no collateral or third-party guarantee necessary in most cases and loan tenure of up to 10 years. Let’s take a look at the five of the most popular business loan schemes for women entrepreneurs.
Cent Kalyani from Central Bank of India
Central Bank of India offers this scheme for women entrepreneurs who are looking to open a new business or want to expand or alter the current one. Females who are into rural and cottage, MSMEs, and entrepreneurs, farming, retailing and government-backed firms can purchase this loan. The purpose of the loan is to meet capital expenditure such as Plant & Machinery/Equipment, etc. and day-to-day expenditure. There are no processing charges applicable on the loan amount. The upper limit of the loan amount that you can avail under this scheme is Rs. 100 Lakhs.
Stree Shakti Package from State Bank of India
Stree Shakti Package, State Bank of India’s business loan for women-owned businesses features a no security required option for loans of up to Rs 5 lakhs. Additionally, the loan is offered at an interest rate lower than the bank’s base rate and is only available to women who own a stake of 51% or above in the business.
Shringaar and Annapurna from Bhartiya Mahila Bank
Bhartiya Mahila Bank offers women entrepreneurs a wide range loans to help them set up new or expand their existing businesses. Two of the more popular options in this category include Shringaar and Annapurna. The Shringaar loan targets women interested in setting up beauty parlours and the Annapurna loan scheme provides financial support to women interested in establishing a food catering business for selling lunch packs.
Synd Mahila Shakthi from Syndicate Bank
Syndicate Bank’s Synd Mahila Shakthi targets both new and current women entrepreneurs. The scheme is available as either a cash credit to meet the working capital requirements of new and existing business units or as a term loan scheme of up to 10 years. A business seeking such a loan needs to have one or more women owning at least 50% of the financial holding.
Shakti Scheme from Dena Bank
The Shakti Scheme from Dena Bank supports women entrepreneurs active in a wide range of sectors including agriculture & allied activities, retail trade, micro credit, education, housing as well as enterprises in the direct/indirect finance, manufacturing and services sectors. The maximum ceiling on the loans being offered differs on the basis of the sector in which the enterprise operates.
The following table compares the above schemes based on some key criteria.
Table1. Comparison of five leading loans available to women entrepreneurs*
|Comparison Criteria||Cent Kalyani (CBI)||Stree Shakti (SBI and Associates)||Shringaar / Annapurna (Bhartiya Mahila Bank)||Synd Mahila Shakthi (Syndicate Bank)||Shakti Scheme (Dena Bank)|
|Eligibility||Women over 18 years of age with no income ceiling for assistance||Women need to own 51% or more of in the enterprise||Applicant age between 20 to 60 years for Shringaar, 18 to 60 years for Annapurna||Women entrepreneur with adequate knowledge /experience of business activity||Women entrepreneur with >50% ownership of business enterprise|
|Max. Loan Amount||Up to Rs. 100 lakhs||Up to Rs. 50 lakhs||Up to Rs 10 Lakhs for Shringaar/Up to Rs50,000 for Annapurna||Up to Rs. 5 Crore||Up to Rs. 20 Lakhs for retail trade, education and housing. Rs. 50,000 under micro credit schemes|
|Loan Term||1 year to 7 years||Varies based on loan amount and other factors||7 years (Shringaar)/3 years (Annapurna)||Maximum of 10 years including moratorium period||Varies based on loan amount and other factors|
|Interest Rates||Base rate+0.25% for loans up to Rs. 10 Lakhs. Over Rs. 10 Lakhs, Base rate+0.50% (+ applicable tenure premium)||0.50% below Base rate if loan amount exceeds Rs. 2 Lakhs, otherwise as per base rate of bank||Base rate+ 2% for Shringaar and Base rate + 1.5% for Annapurna||0.25% below base rate for loans over Rs 10 Lakhs, lesser amounts at base rate||0.25% below base rates for women applicants who are majority stake holders in the company|
|Processing Fee||Fully Waived||Varies based on loan amount and other factors||Varies based on factors such as loan amount||Fully Waived||Varies based on loan amount and other factors|
*The Table is indicative and various loan features are liable to change based on bank’s business requirements. For additional and updated information regarding these as well as other loan schemes, log on to Paisabazaar.
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