Best Government Business Loan for Women Schemes to Avail in 2021

Posted by Rupeek Fintech Pvt Ltd. on May 19th, 2021

Presently, women-led enterprises represent approximately 20% of all MSMEs in India. In absolute numbers, the tally ticks somewhere in the vicinity of 15 million, providing employment to nearly 22 – 27 million individuals. Although most of these enterprises are singly owned, it’s a significant development from what had been the case two decades ago. 

In order to encourage these young talented minds, the Central Government has come up with multiple schemes related to a business loan for women to facilitate better access to capital. From customized business loans for existing businesses to medium-scale female entrepreneur funding, the government had taken several initiatives to support them on their new ventures. Since the eligibility parameters and other requirements vary from one financial institution to another, here is a brief discussion on some easily accessible business loan schemes for women.

Notable Business Loan Schemes for Women Entrepreneurs

With financial institutions coming forward to empower women in their journey, the advent of innovative technology, and multiple loan schemes, India has witnessed steady growth in women’s participation in the entrepreneurial world. In order to support the new-age start-ups, the following are some business funding options the government has introduced.

• Pradhan Mantri Mudra Yojana

The monetary support under this particular scheme is applicable for both expanding existing businesses and developing start-up projects. There are three loan variants under this, such as Shishu, Kishor, and Tarun. Women entrepreneurs seeking a small-scale business loan for new business can obtain up to Rs.50,000 with the first loan variant. Under the Kishor vertical, loans up to Rs. 5 lakhs are available, and they can go as high as Rs. 10 lakhs under Tarun.

• Annapurna Scheme

Offered by the Government of India, this scheme is primarily for women entrepreneurs with a food catering business. The total obtainable amount is up to Rs.50,000 under this business loan for women scheme, which they can utilise for various working capital requirements such as purchasing necessary items like tiffin box, utensil stand, refrigerator or for a gas connection, etc.

However, financial institutions look for a guarantor to sanction this loan where individuals are also required to submit their business assets as collateral. If you don't want to involve your business assets, you can opt for other secured options like gold loans. With several gold loan schemes getting introduced by top NBFCs, you can conveniently start your new venture with a sizeable amount obtained against gold jewels as collateral.

• Prime Minister Rozgar Yojana

PMRY is another Central Government initiative that caters to the needs of emergency funds for businesses. The main aim is to provide financial assistance to self-employed individuals or unemployed women, or homemakers who are looking for funding support to start a business. With a business loan for women up to Rs.5 lakhs to those who are unemployed, this one can help new businesses make up for scant resources.

Even though these schemes are pretty approachable for budding women entrepreneurs, some eligibility parameters are still to be met. Some of the financial institutions emphasize necessary aspects like credit score, repayment track record, family income, etc., while scrutinizing the loan application.

As an alternative, women entrepreneurs can consider gold loans for funding their business if they require a more significant amount or want to bypass the excessive documentation. Some loan providers like Rupeek even carry out KYC formalities at your doorstep and offers fast disbursal once it gets sanctioned. Additional advantages specific to this RBI-certified lender are monthly interest rates starting from 0.79% and flexible repayment schemes. Rupeek offers online gold loan services at over 5000 localities in states across India and you can avail the same via their online application process.There fore, you can consider searching by ‘gold loan near me’ to arrange working capital instead of going through the lengthy documentation process of government-backed business loans.