The business loan is focused on promoting entrepreneurship amongst women. The MSME Ministry of India defines a woman entrepreneurial business as “A small scale industrial unit/industry-related service or business enterprise managed by one or more women entrepreneurs in proprietary concerns or in which she/they individually or jointly have a share capital of not less than 51% as partners/shareholders/directors of private limited company/members of co-operative society’’.
- Women-owned business : Accordingly, the qualifying criteria to avail this business loan are that the enterprise mandatorily has a shareholding of over 50% by women
- EDP participation: Additionally, female entrepreneurs should pursue the Entrepreneurship Development Programmes (EDP) organized by the state agency to obtain a loan under this scheme.
- Applicability: The loan will be extended to small business units engaged in retail trade, manufacturing activities, provision of services. Self-employed professional women like doctors, architects, and CAs are also eligible to obtain a business loan.
The Stree Shakti Loan scheme has financially empowered women, especially in rural areas. Some of the popular small business segments where this scheme finds application are:
- Dairy produce
- Manufacture of readymade clothing
- Marketing of farm produce like seeds
- Production of indigenous unbranded soaps and detergents
- Cottage industries like the manufacture of spices and incense sticks
The loans availed are to be applied exclusively for business purposes. The nature of the loan may be short-term working capital assistance or a long-run term loan to facilitate capital expenditure. Some additional features include:
Relaxation criteria : There are concessions and reductions in margins, with optimal floating interest rates linked to the bank’s base rate to provide economic incentives to women entrepreneurs. For example, the margin will be lowered by 5% in the case of certain categories. However, there is no interest concession offered on loan advances to retail traders
Repayment Tenure
The minimum repayment period offered by SBI bank is 12 months, whereas the maximum repayment period is of 5 years. (may exceed as per the business requirements)