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, private and public sector 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 repayment tenure of up to 10 years.
Let’s take a look at the 5 of the most popular business loan schemes for women entrepreneurs.
Cent Kalyani from Central Bank of India – Interest rate: 8.30% onwards
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 industries, MSMEs, entrepreneurs, and women working in farming, retailing and government-backed firms can avail this loan. The purpose of the loan is to meet day-to-day requirements, such as purchase of plant & machinery/equipment, etc. and working capital 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 Lakh with no collateral required.
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 lakh. 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.
a.) BMB Shringaar – Loan for Beauty Parlour, Saloon or Spa
Features:
- Age of applicant min 20 years and max 60 years
- Repayment tenure is maximum 7 years
- Collateral free loan to be covered under CGTMSE scheme
- Tie up with Naturals, Cavinkare and Lakme
b.)BMB Annapurna Loan – Food Catering
Features:
- Age of applicant min 18 years and max 60 years
- Collateral Free to be covered under CGTMSE
- Repayment tenure up to 3 years
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. Loan is offered with no processing fee and rebate of 0.5% on loans up to Rs. 5 lakh.
The following table compares the above schemes based on some key criteria:
Comparison of 5 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 lakh | Up to Rs. 50 lakh | Up to Rs 10 Lakh for Shringaar/Up to Rs. 50,000 for Annapurna | Up to Rs. 5 Crore | Up to Rs. 20 Lakh 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 | 8.75% onwards | 0.50% below Base rate if loan amount exceeds Rs. 2 Lakh, otherwise as per base rate of bank | As per bank’s criteria | 0.25% below base rate for loans over Rs 10 Lakh, lesser amounts at base rate | 0.25% below base rates for women applicants who are majority stake holders in the company |
| Processing Fee | Nil | Varies based on loan amount and other factors | Varies based on factors such as loan amount | Nil | Nil |
| Additional Features | No collateral/third party guarantee required Hypothecation of all stocks and assets created from bank’s fund is required as security | No security required for loans of up to Rs. 5 lakhs in the tiny sector No interest concession for advances provided to retail traders | Shringaar features tie up with Naturals, Cavinkare and Lakme Ltd. Both Shringaar and Annapurna is collateral free and covered under CGTMSE | Free credit card No Third party guarantee for loans under purview of CGMSE | Micro credit and retail stores are also eligible along with enterprises operating in the agriculture and allied sector |
Note: The mentioned interest rates, fees, and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
*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.com.
Additional Business Loan Schemes for Women
KBL Mahila Udyog Loan
KBL Mahila Udyog loan is offered 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, wherein the maximum repayment tenure is up to 120 months. Mahila Udyog Loan is offered to women entrepreneurs where minimum 51% of shareholding and controlling stake is held by them in a firm or company.
Mahila Udyam Nidhi Scheme is offered to women entrepreneurs with the aim of providing financial assistance to setup new projects in small scale sector and improving SSI units. This scheme also helps in the expansion, upgradation, technology advancement and diversification of tiny and SSI units.
Also Read:
Mahila Samridhi Yojana
SIDBI – Schemes, Functions, Objectives & Steps to Apply for Loan
Stand Up India Scheme – Interest Rate, Eligibility & Steps to Register
PMRY – Scheme Eligibility, Documents, Implementation
NABARD Schemes – Interest Rate, Subsidy, Loan & Funds Under Nabard
KVIC – Objective, Functions & Scheme Detail
Small Business Loans – Eligibility, Interest Rates and Top Providers
Most Successful Small Business Ideas in India
Top Small Business Ideas for Men
Startup Business Loans – Eligibility, Types & How to Approach Banks
16 Comments. Leave new
I am in a government service, I want to start business i.e. a small scale fruit nursery so that i can provide seedlings of fruit crops to farmers at lowest rate. Am I eligible for any loan while doing my current job
For this you need to ask from your respective Government Institution whether you can do business while in service. If they allow then you can approach any financial institution like private and public sector banks, NBFCs, Micro Finance Companies, NGOs and even co-operative societies and apply for a business loan.
it is really helpfull for the women who wants to do sumthing of their own
Thanks for the feedback.
as am from chennai… am doing a saree business at my home in a small level, am i eligible to get loan pls reply
Yes, you are eligible for business loan and for that you can check MUDRA loan scheme initiated by Government of India and Start-up India Scheme.
I am NRI women Entrepreneur , looking for loan for Restaurant business set up in Hyderabad , India.
is it possible?
To start a business in Hyderabad you need to have FSSAI license and license from state government. Moreover enough finances are also required with an NOC from Chief Fire Officer.
I am a part-time teacher who has started my tourism business. Can I get loan for working capital?
Yes, sure you can get loan to start your own tourism business. For that you just need to contact any non-banking financial firm and ask for it. You can also approach MUDRA loan scheme started by Government of India to get loan starting from Rs. 50,000.
Hi, Thanks for the information.
I am self-established Physiotherapist in Ghaziabad, would like to expand my centre, add new machinery/equipment. What you suggest Doctor loan will be more helpful or Women Entrepreneur Loans?
Please advise. Thanks
Hi Ankita,
As you mentioned that you already manage a setup reagrding Physiotherapy in Ghaziabad and want to expand it. So, if it is exclusively for buying machinery or equipment then you must opt for Doctor Loan. As Doctor Loan is altogether a sepearte business loan category offered by leading financial institutions like SBI, HDFC, Bajaj Finserv, ICICI bank, Tata Capital, etc. Even the interest rate offered under this loan category is lower, as compared to other types of business loans. The maximum loan amount can be borrowed up to Rs. 5 crore.
Hope this solves your concern.
I want to start a preschool of my own (upto UKG). Have seen a preschool which has come for sale and I want to take that and run that school .
How much can i get as loan and what all documents is needed.
Also how much time does it take to get a loan and Interest rate
Hi Ms. Yamini,
Getting a business loan to run a school is not a tough task. If you have already decided on the school then you just need to approach a private or public sector bank (renowned) to get a MSME or business loan. Banks like SBI, HDFC, ICICI, Axis Bank, Bank of Baroda, Punjab National Bank, Canara bank, etc. can offers you loan to start a pre-school. The loan amount can range anywhere between Rs. 1 lakh to Rs. 50 lakh depending upon the requirements. The interest rate offered shall be from 14.99% per annum onwards. You can also approach NBFCs if your are new to credit or does not have financial history. Loan approval is generally between 3-7 working days and documents required are defined by respective bank.
Hope this solves your concern. Best of luck for your venture.
I owe a business. Iam a unmarried. Do i always require a male co applicant to avail loan. I want to get loan of my own do their any option available?
Hi Ms. Anjali,
No, now you do not require a male co-applicant to avail a loan for your existing business or starting a new business. If you have good credit score with decent repayment history of any previous or existing loan, then you can apply for loans with leading banking institutions like HDFC bank and ICICI bank. You can also check for leading NBFCs like Bajaj Finserv, Aditya Birla, Tata Capital, etc. for loan options.
Thanks.