Business Loans For Women

Following are some of the best business loan for women in India:

1. Cent Kalyani from the Central Bank of India

Cent Kalyani is a women business loan and startup loan offered by the Central Bank of India for women entrepreneurs who want to open a new business or expand/modernise the existing one.

Key Features:

• The loan amount available is up to Rs. 1 Crore.
• Interest rate ranges from 8.70% to 9.20% p.a., depending on the loan amount.
• 0.25% interest concession if an account is rated by an external agency.
• Nil processing fee is charged.
• The purpose of the loan is to meet capital expenditures (like plant & machinery/equipment, etc) and to meet day-to-day expenditures.
• The nature of the facility is Term Loan Fund Based Working Capital Facility – Overdraft or Cash Credit Non Fund Based Working Capital – Letter of Credit or Letter of Guarantee, etc.
• The minimum margin required is 20%.
• Primary security required is the charge on stock/ receivables/ plant & machinery, equipment and all other unencumbered assets acquired for business.
• Comprehensive insurance of stock, machinery equipment, etc. with a Bank clause is required.

2. Mudra Loan under PMMY

MUDRA Loan under Pradhan Mantri Mudra Yojana (PMMY) was launched in 2015. This prime minister loan scheme for ladies is offered by banks for individuals, startups, business owners, and women entrepreneurs across India. The women borrowers can obtain a loan amount of up to Rs. 10 Lakhs under the scheme (under Shishu, Kishor, and Tarun categories) to start their own business or expand the existing one.

Key Features:

• Mudra loan for women is offered to women entrepreneurs to encourage them and promote the MSME sector.
• No minimum limit for loan amount and the maximum loan offered is up to Rs. 10 Lakhs.
• Concession in interest rates for women entrepreneurs.
• These are collateral-free business loans that require no collateral/ security by banks or NBFCs.
• The loan is offered as a Term Loan as well as an Overdraft.
• The loan is offered in 3 categories viz. Shishu, Kishor, and Tarun.
• Repayment tenure is up to 5 years.
• The processing fee varies between 0% to 0.50% of the sanctioned loan amount.
• Loans are available for women living in urban as well as rural regions of India.

3. Self Help Group-Bank Linkage Programme (SBLP) from ICICI Bank

ICICI Bank has launched a collateral-free business loan scheme for Self Help Groups (SHGs) of 10 to 20 women. The borrower can obtain a maximum loan amount of up to Rs. 20 Lakhs under this women loan scheme with a repayment tenure of up to 4 years. The SHG must have a minimum existence of at least 6 months and a minimum savings/corpus of Rs. 5,000 is required. A group of 10-20 women are eligible to avail of funds under this scheme.

Key Features:

• The purpose of the loan is business expansion, income generation and livelihood activities.
• The maximum loan offered for SHG is Rs. 20 Lakhs.
• The interest rate for the scheme ranges from 7% to 22.85% p.a.
• No security has to be offered to avail of this loan facility.
• The processing fee is up to 2% of the sanctioned loan amount.
• The maximum tenure for the loan repayment is 48 months.

4. Stand-Up India

Stand Up India is a business loan scheme by the Indian government to offer credit facilities for setting up Greenfield Enterprises for a loan amount of Rs. 10 Lakhs to Rs. 1 Crore.

Key Features:

• The loan amount available under this women entrepreneurs loan ranges from Rs. 10 Lakhs to Rs. 1 Crore.
• A working capital limit above Rs. 10 Lakhs will be sanctioned by way of a Cash Credit limit.
• The interest rate for this scheme must not exceed the Base Rate + MCLR + 3% + Tenure Premium.
• Maximum repayment tenure is up to 7 years, including a moratorium period of 18 months.
• The loan proceeds are expected to cover 85% of the project’s cost.
• Primary security or guarantee of Credit Guarantee Scheme for Stand-up India Loans (CGFSIL) is required as collateral.

5. PNB Mahila Udyami

Punjab National Bank (PNB) provides the PNB Mahila Udyami scheme for financing women for any activity (in manufacturing/ service/ trading/ small business etc.) for income generation. Any individual women/ women entrepreneurs/ enterprises where women entrepreneurs have at least 50% of financial holding is eligible for the scheme. However, preference will be given to women under ST/SC/BPL Card Holders.

Key Features:

• The nature of the loan is Term, Loan, and Working Capital Loan.
• Loan amount available up to Rs. 10 Lakhs for new & existing units.
• Tenure of 3 to 5 years is available for a Term Loan and 3 years for an Overdraft Facility, along with a moratorium period of 3 to 6 months (depending on the type of activity and income generation).
• The margin requirement for loans up to Rs. 2 Lakhs is Nil, 20% for loans above Rs. 2 Lakh up to Rs. 5 Lakhs, and 25% for loans above Rs. 5 Lakhs to Rs. 10 Lakhs.
• More preference will be given to categories of women entrepreneurs in R-SETIs/ Skill Development Institutions, or any other training institute.
• Applicant should not be a defaulter to any bank or financial institution.

Following are the different government-backed types of business loan for women in India:

• Mudra Loan for Women: This collateral-free business loan scheme provides financial support to ambitious women entrepreneurs for starting/expanding their businesses. This loan is offered under three different categories as mentioned below:
  • Shishu: The maximum loan offered under this category is Rs. 50,000 at the initial stage.
  • Kishor: This loan is offered to already established businesses for conducting improvement services. The loan amount offered under this scheme is Rs. 50,000 to Rs. 5 Lakhs
  • Tarun: This loan is offered to existing well-established businesses for expansion. The maximum loan amount offered is Rs. 10 Lakhs.

• Annapurna Scheme: Under this government business loan scheme, the Indian government offers loans up to Rs. 50,000 to food catering businesses. The funds can be used for working capital requirements like the purchase of a mixer grinder, utensils, working tables, etc. Once the loan is sanctioned, the borrowed amount has to be repaid within 36 EMIs. The interest rate is determined depending on the bank and the market rate.
• Stree Shakti Yojana: It is a unique government-backed scheme for women entrepreneurs that provides certain concessions. To avail of the benefits of this scheme, women must have the majority of ownership in the business and they must be enrolled under the Entrepreneurship Development Programme organised by their agencies. This scheme provides an interest concession of 0.05% on loans above Rs. 2 Lakhs.
• Dena Shakti Scheme: This scheme provides business loans up to Rs. 20 Lakhs to women entrepreneurs in manufacturing, agriculture, retail stores, micro-credit, and small enterprises. Under this scheme, a concession of 0.25% is provided in the interest rate. Also, women entrepreneurs can obtain a loan up to Rs. 50,000 under the micro-credit category.
• Bhartiya Mahila Bank Business Loan: This small business loans for women scheme is implemented by the Bhartiya Mahila Bank. It offers loans up to Rs. 20 Crores to women entrepreneurs to help them meet their working capital needs, expansion of businesses, or manufacturing enterprises. This scheme offers loans under the following different plans:
  • Shringaar: This collateral-free loan is offered to self-employed women/homemakers who are planning a start-up or for meeting daily business expenses.
  • Parvarish: This loan is offered to self-employed women/homemakers who are looking to set up daycare creches. This scheme offers collateral-free loans up to Rs. 1 Crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises.
  • Annapurna: This collateral-free loan is offered to food entrepreneurs aged between 18 to 60 years who want to start/expand their small businesses.

• Mahila Udyam Nidhi Yojana: This scheme is offered by PNB and SIDBI to support women entrepreneurs in setting up a new small-scale business venture by providing loans up to Rs. 10 Lakhs. The borrowed funds can be repaid in 10 years at affordable interest rates.
• Orient Mahila Vikas Yojana Scheme: This scheme was launched by the Oriental Bank of Commerce for women having ownership of 51% share capital individually/jointly in a proprietary. The scheme requires collateral for loans between Rs. 10 Lakhs and Rs. 25 Lakhs. It can be repaid within a tenure of up to 7 years. This scheme also offers up to 2% concession in interest rates.
• Cent Kalyani Scheme: It can be availed of by new and existing entrepreneurs and self-employed women for eligible micro/small enterprises like agriculture, farming, cottage industry, and retail trade. No collateral, security or guarantors are required for this loan. It comes with a repayment tenure of up to 7 years.
• Udyogini Scheme: This was implemented by the Women Development Corporation under the government of India to promote and motivate women entrepreneurs by providing them with financial support. The scheme majorly supports illiterate women who are living in rural and backward areas.
• Pradhan Mantri Rozgar Yojana: The main objective of PMRY is to provide self-employment opportunities to the educated youth of India. The scheme provides business loans up to Rs. 1 Lakh to unemployed Indian youth to start their business project and create a scope of employment for others. The loan can be rapid within 3 to 7 years.
• Synd Mahila Shakti Scheme: This Mahila loan scheme 2023 was launched by the Syndicate Bank to support women entrepreneurship development by offering financial backup up to Rs. 5 Crores, a 0.25% interest concession for loans above Rs. 10 Lakhs, and 100% waiver in processing fee.

Women can apply for a small business loan either by visiting the official website of the concerned financial institution or visiting their branch to execute the loan formalities. The steps of the process of applying for a women’s business loan are mentioned below:

• Determine your business loan eligibility.
• Choose the most suitable lender and scheme.
• Fill out the loan application form.
• Submit it along with the required documents.

The basic eligibility criteria for women entrepreneurs loans are given below:

• Age: Minimum 18 years and maximum 65 years.
• Credit record: Applicants without any past loan defaults.
• Occupation: Individuals, MSMEs, Partnership Firms, Sole Proprietorships, and Limited Liability Partnerships, engaged in the trading, manufacturing, and services sectors.
• Annual Turnover: As defined by the lending institution.