Synopsis: In today’s blog, we spotlight some of the best government schemes targeted at up-and-coming women entrepreneurs to give wings to their industrial spirits.
India has the third-largest startup ecosystem in the world, with its unicorns’ numbers expected to grow to 250 in 2025. And yet, how many of these businesses are helmed by women entrepreneurs?
According to the 2021 Mastercard Index of Women Entrepreneurs, India features amongst the worst-ranked countries for women’s entrepreneurship. In fact, only 18% of MSMEs registered on the Udyam portal are owned and led by Indian women—a marginal improvement from 16% in December 2021.
These trends exist despite a BCG report stating that over a 5-year period, women-founded startups generate 10% more accumulated revenue while employing 3x more women. And the increased participation of Indian women in the labor force can add another $ 700 billion to the global GDP, per a McKinsey Global report.
A recent ICRIER-NABARD survey found that over 47% of entrepreneurs find it difficult to source loans when the business owner is a woman. With credit demand by women-owned very small businesses in India currently standing at Rs. 83,600 crores, it has become imminent for the government to give a fillip to women entrepreneurs by easing access to capital.
Below, we highlight the top 7 government initiatives that have enabled women to break into the business space.
7 Government Schemes for Empowering Women Entrepreneurs
To enable women to smash the glass ceiling while embracing their entrepreneurial spirit, the Indian government has launched various schemes specially targeted at women. We elaborate on the top 7 women entrepreneurs-oriented government initiatives below.
1) Women Entrepreneurship Platform (WEP)
NITI Aayog, in partnership with SIDBI, has launched a WEP targeted at existing and budding women entrepreneurs. Based on 3 pillars–Gyaan Shakti, Iccha Shakti, and Karma Shakti, it aims to provide an enabling ecosystem to women entrepreneurs for sourcing financing, mentorship, apprenticeship, and corporate partnerships.
Additionally, WEP provides incubation and accelerator support to all women-led businesses at any startup stage, ranging from ideation to scaling up. Best of all, it helps women entrepreneurs build a community of like-minded women that can support and guide each other.
2) Udyogini Scheme
Implemented by the Women Development Corporation under the Indian government, the Udyogini scheme is aimed at aspiring women entrepreneurs based in rural and underdeveloped areas.
Under this scheme, women with an annual family income of under Rs. 1.5 lakh, can avail of interest and collateral-free loans up to Rs. 3 lakhs for starting a micro-enterprise in any of the 88 designated small-scale industries. Furthermore, the government offers a 30% subsidy for easy repayment options while imparting numerous functional skills, such as business planning, costing, pricing, and feasibility.
3) Mudra Loans
Pradhan Mantri Mudra Yojana (PMMY) was launched in April 2015 to provide collateral-free loans to small and micro enterprises based in the manufacturing, retail, agriculture, and service sectors. These loans are categorized into 3 categories: Shishu loans (up to Rs. 50,000), Kishor loans (from Rs. 50,000 to Rs. 5 lakhs), and Tarun loans (from Rs. 5 lakhs to Rs. 10 lakhs).
Presently, Mudra offers a 25 bps reduction on interest rates to NBFCs/MFIs extending loans to women entrepreneurs. While not exactly a women-exclusive scheme, over 68% of Mudra loans, amounting to Rs. 6.36 lakh crores, were sanctioned to women entrepreneurs between FY15 and FY21.
4) Bharathiya Mahila Bank Business Loan
Established in 2017 to provide funding support to women, Bharathiya Mahila Bank was later amalgamated with SBI but has continued to provide business loans. Here, women entrepreneurs planning to start a manufacturing unit or a real estate business can avail of loans of up to Rs. 20 crores.
Collateral-free loans are also available when the loan amount is under Rs. 1 crore. These business loans are further classified as BMB Shringaar (beauty business), BMB SME Easy, BMB Annapurna (food catering), and BMB Parvarish (daycare center).
5) Annapurna Scheme
Another popular government initiative is the Annapurna Yojana, where women entrepreneurs are offered loans up to Rs. 50,000 for opening a food catering business. The loaned amount can be utilized for working capital requirements, including the purchase of kitchen essentials. However, these loans require collateral and a guarantor. Also, they need to be repaid over a 3-year term.
6) Stree Shakti Scheme
An initiative of SBI, the Stree Shakti scheme is exclusively tailored for women entrepreneurs who are either already running a business or plan to run one. Under this scheme, women engaged in the manufacturing, retail, or service sector can avail of loans. Even self-employed women, such as doctors and architects, can get loans.
The applicable interest rates are lowered by 0.5% for loans extended to women entrepreneurs of over Rs. 2 lakhs. Furthermore, there is no requirement for a pledged security for loans up to Rs. 5 lakhs. However, to be eligible under this scheme, women need to be a part of the Entrepreneurship Development Programmes (EDP) run by their state governments.
7) Dena Shakti Scheme
Dena bank, a public sector bank, was set up to provide women with a platform to avail of business loans. Under the Dena Shakti Scheme, financial support is extended to women entrepreneurs focused on agriculture, retail trade, education, housing, and the SME segment. Women-led businesses can get loans up to Rs. 20 lakhs, repayable over 7 years, with a 0.25% concession in applicable interest rates. A microcredit loan of Rs. 50,000 can also be sought under the Dena scheme.
Final Words – Let Protium Empower Your Business
Despite running highly-efficient enterprises, women face severe credit restraints to establishing and running a business. The government has been playing an instrumental role in giving a fillip to women-led enterprises by supporting them through financial support and mentorship.
Are you looking for a business loan, which, unlike government loans, is not restricted in end-use and tied to stringent eligibility requirements? At Protium, you can get collateral-free MSME loans that are tailored to your needs and processed within 3 days. Call today at 8828827800 to get in touch with our customer representative!