Entrepreneurship ventures or startups are definitely not considered nowadays as new business concepts in India. In order to impetus further growth of entrepreneurial initiatives, leading Private, and Public Sector Banks, NBFCs have introduced various business loan schemes for women entrepreneurs. Few and selected lenders also offer business loans and working capital loans at concessional interest rates to women entrepreneurs. Let’s now take a look at the 5 most popular loan schemes for women entrepreneurs in India offered by financial institutions.
Business Loan Schemes for Women Entrepreneurs – January 2023
1. Cent Kalyani from the Central Bank of India
Central Bank of India offers business and startup loans for women entrepreneurs who are looking to open a new business or want to expand or alter their current one.
- Interest Rate Range: 8.40% p.a. – 8.65% p.a.
- Interest Rate for Loan up to Rs. 10 Lakh: 8.40% p.a.
- Interest Rate for Loan above Rs. 10 Lakh and up to Rs.100 Lakh: 8.65% p.a.
- Purpose: To meet day-to-day requirements, such as the purchase of plant & machinery/equipment, etc., and working capital expenditure.
- Nature of Loan: Term Loan fund-based working capital facility – Overdraft/ Cash Credit non-fund-based working capital – Letter of Credit/ Letter of Guarantee, etc.
- Loan Amount: Up to Rs. 100 lakhs
- Processing Fee: Nil
- CGTMSE Coverage: Available
- Collateral/Security or Third Party Guarantee: Not required, as covered under the Guarantee cover of CGTMSE
- Insurance: Comprehensive insurance of stock, machinery/equipment, etc with a bank clause
- Women entrepreneurs who are rendering services to rural and cottage industries, MSMEs, and women working in the farming, retailing, and government-backed firms can avail business loan
Note: With effect from 10th Jan 2023, Bank’s 1-year MCLR stands at 8.15% & Additional Interest concession of 0.25% on the interest rate if an account is rated by an external agency.
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2. Mudra Loan under PMMY
Launched in 2015, MUDRA Loan under Pradhan Mantri Mudra Yojana (PMMY) is a loan scheme offered by banks for individuals, startups, and business owners, as well as women entrepreneurs across India. Under this scheme loan amount up to Rs. 10 lakh are offered to women who want to start their own business or expand the existing one. The loan amount is offered under three categories named Shishu, Kishor, and Tarun. Find below the basic features of the loan scheme offered by banks and NBFCs under the Mudra Yojana:
- Concessional Interest Rates for Women Entrepreneurs
- Collateral-Free Business Loans: No collateral or security is required by banks or NBFCs
- Loan Type: Term Loan / Overdraft
- 3 Loan Categories: Shishu, Kishor, and Tarun
- Loan Amount: No minimum limit and maximum up to Rs. 10 lakh
- Repayment Tenure: Up to 5 years
- Processing Fee: Nil to 0.50% of the sanctioned loan amount
- Loans for Women living in both Urban and Rural regions of India
Mudra loans are offered to women to encourage women entrepreneurs and to promote the MSME sector.
Latest Business Loan Interest Rates – Jan 2023
|Axis Bank||14.95% - 19.20% p.a.||Apply Now|
|Bajaj Finserv||9.75% - 25% p.a.||Apply Now|
|Flexiloans||1% per month onwards||Apply Now|
|HDB Financial Services Ltd.||Up to 36% p.a.||Apply Now|
|HDFC Bank||10% - 22.50% p.a.||Apply Now|
|IDFC First Bank||15% p.a. onwards||Apply Now|
|Indifi||1.50% per month onwards||Apply Now|
|Kotak Mahindra Bank||16% - 19.99% p.a.||Apply Now|
|Lendingkart||1% - 2% per month||Apply Now|
|Mcapital||2% per month onwards||Apply Now|
|NeoGrowth Finance||19% - 24% p.a.||Apply Now|
|Tata Capital||12% p.a. onwards||Apply Now|
|UGRO Capital||14.90% p.a.||Apply Now|
3. ICICI Bank – Self Help Group-Bank Linkage Programme (SBLP)
ICICI Bank has recently introduced Collateral-free business loans for Self Help Groups (SHGs) of 10-20 women. The maximum loan amount offered under this scheme is Rs. 10 lakh with a repayment tenure of up to 3 years.
- Minimum existence of SHG should at least 6 months
- Group of 10-20 women are eligible to avail funds
- Minimum Savings/Corpus of Rs 5,000 is required
- Purpose of Loan: Business expansion, and income generation and livelihood activities
- Loan Amount: Up to Rs. 7.5 lakh for customers of other Banks and up to Rs. 10 lakh for ICICI Bank customers
- Collateral-free loans
- Interest Rate: Up to 21.50% p.a.
- Repayment Tenure: Up to 36 months
4. Stand-Up India
Stand Up India is a loan scheme initiated by the Govt. to offer credit facilities for setting up Greenfield Enterprise for a loan amount of Rs. 10 lakh to Rs. 1 crore.
- Interest Rate: (Base Rate + (MCLR) + 3% + Tenor Premium)
- Repayment Tenure: Up to 7 years, including a moratorium period of 18 months
- Working Capital limit above Rs. 10 lakh to be sanctioned by the way of Cash Credit limit
- The specification of the loan is expected to cover 85% of the project cost. However, it will not be applicable if the borrower’s contribution along with convergence support comes from any other schemes that exceed 15% of the project cost
- Collateral: Required as primary security or guarantee of Credit Guarantee Scheme for Stand-up India Loans (CGFSIL)
5. PNB Mahila Udyami
Nature of loan in Term, Loan and Working Capital Loan. Business loan scheme of up to Rs. 10 lakh for new & existing units with tenure of 3-5 years (Term Loan) and 3 years (Overdraft Facility) with moratorium period of 3-6 months depending upon type of activity and income generation. The Margin up to Rs. 2 lakh is Nil, above Rs. 2 lakh – Rs. 5 lakh is 20% and Above Rs. 5 lakh to Rs. 10 lakh is 25%.
- Any individual women/ women entrepreneur (s)/ Enterprise where women entrepreneurs hold not less than 50% of financial holding. However, preference will be given to women belonging to ST/SC/BPL Card Holders
- Categories of women entrepreneur strained in R-SETIs/ Skill Development Institutions etc. any other training institute are given more preference
- Applicant shopuld not be a defaulter to any Bank / Financial Institution
- Loan facility availed by the beneficiaries under Govt. scheme are not eligible
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Small Business Loans for Women: Features
- Interest Rate: Discounted or concessional interest rates for Women Borrowers that shall vary from bank to bank
- Loan Amount: No Minimum Limit, Maximum Loan Amount Up to Rs. 10 lakh, may exceed
- Repayment Tenure: From 12 months to 5 years
- Collateral/Security or Third-party Guarantee: Not required
- Loan Type: Term Loan (Short or Long term), Unsecured loan, Working Capital Loan, Overdraft
- Age Criteria: Min. 18 years and Max. 65 years
- Applicants with no past loan defaults shall be considered
- Individuals, MSMEs, Sole Proprietorships, Partnership Firms, and Limited Liability Partnerships (LLPs), engaged in the trading, manufacturing, and services sector are eligible
- Annual Turnover: To be defined by the bank or lender
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Documents Required for Loan Application
- Duly filled application form with 2 passport-size photos of the applicant
- Self-written Business Plan
- Identity Proof – Driving License, Voter ID Card, PAN card, Passport, Aadhaar card, etc.
- Address Proof: Passport, Utility Bills, Aadhar Card, Voter’s ID card
- Income Proof: Last 6 months’ bank statement, Salary Slips, Bank statement
- Business Incorporation Certificate
- Any other document required by the lender
Additional Loan Scheme for Women Entrepreneurs
KBL Mahila Udyog Loan from Karnataka Bank
KBL Mahila Udyog Loan is offered to women entrepreneurs where a minimum of 51% of the shareholding and controlling stake is held by them in a firm or company. KBL Mahila Udyog loan is offered at an interest rate starting from 11.63% p.a. to meet funding requirements for any source of income generation activity. This loan is offered exclusively to women and the maximum loan amount offered is Rs. 10 lakh (Rs. 2 lakh for working capital loan), wherein the maximum repayment tenure is up to 120 months with margin of 15%-30%.
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Q. How can a woman apply for a small business loan?
Ans. Women borrowers can visit the official website of the bank to apply or can personally visit the bank to perform loan formalities. Secondly, the women applicants can check and compare various business loan options at competitive interest rates.
Q. What loans are available for women to start a business?
Ans. Business loans for women come in almost every type that can be used by applicants like MSME loans, business loans, working capital loans, term loans, etc.
Q. What loan options are there to start a small business for women?
Ans. Small Business Loans or Micro Finance lending is offered by various NBFCs, Micro Finance Institutions (MFIs), Small Finance Banks (SFBs), Regional Rural Banks (RRBs), Co-operative Banks, etc. at concessional interest rates.
Q. What are the government loans for women to start a business?
Ans. Women entrepreneurs can apply for business loans under various Govt. loan schemes like Mudra Yojana, PMEGP, CGTMSE, Startup India, Standup India, psbloansin59minutes.com, etc.