The increasing presence of women in the business field as entrepreneurs has changed the demographic characteristics of business and economic growth of the country. Women-owned businesses enterprises are playing a more active role in society and the economy, inspiring academics to focus on this interesting phenomenon.
ATTRACTIVE LENDING SCHEMES
Majority of the nationalised banks in India have been formulating and providing attractive lending schemes to promote entrepreneurship among women. Low awareness about such schemes ends up in not properly utilising the opportunities open. Most of the schemes offer relief in the terms of collateral security and interest rates. Few among them are analysed below:
- Priyadarshini Yojana scheme by Bank of India gives a relaxation for collateral security up to Rs.5 Lakh loans and for SSI (small scale industries) units, interest reliefs are also available.
- Orient Mahila Vikas Yojana scheme by Oriental bank of commerce offers collateral free loans up to Rs.10 Lakhs (in case of SSI up to 25 Lakhs) and also concessions up to 2 %.
- Stree Shakti package by SBI which is available to women having 50% ownership in a business or firm, offers 0.50 % concession on interest if loan amount exceeds 2 Lakhs. Only women entrepreneurs who have taken part in Entrepreneurship Development Programmes organized by state-level agencies are eligible to apply. No security is required for loans up to Rs.5 Lakhs in case of tiny sector units. The margin will be lowered by 5% as applicable to separate categories.
- Bharatiya Mahila Bank:
The Bank is the first of its kind in the Banking Industry in India formed with a vision of economic empowerment for women. Launched in 2013, the Bank has carved a niche for itself as a pan India Bank and presently, has over 100 branches across the country. While the Bank focuses on the entire pyramid of Indian women, special attention is given to economically neglected, deprived, discriminated, underbanked, unbanked, rural and urban women to ensure inclusive and sustainable growth. The Bank with a team of professionals with rich experience and expertise has designed and developed new products and services to suit the needs of women of all segments including Self Help Groups, women entrepreneurs, salaried women, HNIs and Corporates. The Savings Bank rate of interest for Rupees One lakh and above is 5% and for an amount less than Rs. One lakh, the interest rate is 4.5%. The Bank offers BMB Smart banking – the internet banking facility with many value-added features. When in need they can also access Fixed Deposits to avail premature facility. The Bank’s Mobile Banking App can be freely downloaded from Google Play Store for Android mobiles and Apple Store for iPhone. The bank is one of the pilot Banks for the introduction of the new payment system UPI, launched by NPCI. The Bank also conducts programmes on financial literacy, skill development, training for women of all segments of the society so that women, in turn, generate more income, more jobs and growth opportunities and contribute significantly for the economic growth of the nation.
- SIDBI Mahila Udyam Nidhi scheme under Small Industries Development Bank of India provides financial assistance up to Rs. 10 lakhs to female entrepreneurs for setting up the new industrial venture in small scale sector.
- Dena Shakthi scheme by Dena bank offers a 0.25 % reduction in interest rate and is available for entrepreneurs engaged in agriculture, manufacturing, micro-credit, retail stores or small enterprises.
- Punjab National Bank offers 5 different schemes for women entrepreneurs, each one targeting a specific population.
PNB Mahila Samridhi Yojana – This scheme was launched to provide financial assistance to women who wish to set up boutiques, beauty parlors, cyber cafes, Xerox stores, telephone booths, etc.
PNB Mahila Udyam Nidhi Scheme – This scheme aims to reduce the gap in equity, helping women set up new ventures in the small scale sector or enhance their current undertakings.
PNB Scheme for financing crèches – This scheme aims to provide financial assistance to women who are keen on setting up crèches. The loan can be used to purchase the necessary materials and to meet any recurring expenditure.
PNB Mahila Sashaktikaran Abhiyan – This scheme provides credit to women who intend to establish small and micro enterprises in the non-farm sector, offering fee waiver and lower interest rate.
PNB Kalyani Card Scheme – This scheme provides loans for women engaged in agricultural, farm or non-farm activities.
- Canara Bank has established a Centre for Entrepreneurship Development (CED) for Women. The bank has also opened exclusive branches for women – the Mahila banking division, the first of its kind in the banking industry.
- Cent Kalyani scheme is provided by Central Bank of India for the benefit of female entrepreneurs. Under this scheme, a women entrepreneur can get adequate financial assistance for starting a new venture. Cent Kalyani provides loans to new as well as experienced business owners, professionals and self-employed. Besides, these business loans for women can also be availed by retail traders, small-scale industry owners and women entrepreneurs engaged in agricultural and allied activities as well as in village and cottage industries. Concession in rates of interest available & no Collateral Security as Advance is covered by Guarantee cover of CGTMSE (CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL ENTERPRISES).
- The udyogini scheme by Punjab and Sind Bank that motivates female business owners to obtain loans online at liberal terms and low-interest rates. This loan is taken for establishing small scale industries, business enterprises as well as for agricultural activities. Moreover, this loan is also available for retail traders and other self-employed female entrepreneurs.
Favorable Government Schemes/Subsidies
- TREAD(Trade Related Entrepreneurship Assistance and Development) subsidy scheme for women:
Provided by the Ministry of Micro, Small & Medium Enterprises, Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme for Women offers a subsidy of up to 30% of the total cost of the project (that will be assessed by lending institutions). Women who can benefit from this scheme include those who are not being helped by banks. Generally, the applicants under this scheme are illiterate/semi-literate or lesser privileged women. The request for subsidy is considered for approval only if it is made through an NGO.
- Mahila Coir Yojana:
Providing assistance to artisan women living in rural areas (producing coir fibre), The Mahila Coir Yojana Subsidy Scheme is a boon for women looking for funding options. The scheme materializes motorized ratts/ motorized traditional ratts that can be used by women for spinning the coir yarns.
As per the scheme, 75% of the total cost of the motorized ratt would be provided by the Coir Board, while the rest 25% would be raised by financial institutions. Only one person from a family can avail the benefits of this scheme.
- Mahila Udayam Nidhi:
Mahila Udayam Nidhi is a subsidy scheme introduced by the Puducherry Government. Women entrepreneurs who want to start a new SSI unit in Puducherry can apply for this scheme. A seed capital of almost 25% is provided for a project worth Rs.10 lakh. Out of the remaining amount, 65% is funded in the form of term loan and the rest of the 10% is considered to be promoter contribution. Repayment term of this loan is between six to eight years, which includes a 12 year moratorium period.
- Mahila Vikas Nidhi:
SIDBI has developed this fund for the entrepreneurial development of women especially in rural areas. Under Mahila Vikas Nidhi grants loan to women are given to start their venture in the field like spinning, weaving, knitting, embroidery products, block printing, handlooms handicrafts, bamboo products etc.
- Rashtriya Mahila Kosh:
In 1993, Rashtriya Mahila Kosh was set up to grant micro credit to poorest and asset less women at reasonable rates of interest with very low transaction costs and simple procedures.
- Startup India Scheme:
Stand-Up India Scheme Facilitates bank loans between 10 lakh and 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise. This enterprise may be in manufacturing, services or the trading sector. In case of non-individual enterprises at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur. The rate of interest would be lowest applicable rate of the bank for that category. The loan is repayable in 7 years with a maximum moratorium period of 18 months. For drawal of Working capital up to 10 lakh, the same may be sanctioned by way of overdraft. Rupay debit card to be issued for convenience of the borrower. Working capital limit above 10 lakh to be sanctioned by way of Cash Credit limit.
In addition to the special schemes for women entrepreneurs, various government schemes for MSMEs also provide certain special incentives and concessions for women entrepreneurs. For instance, under Prime Minister’s Rozgar Yojana (PMRY), preference is given to women beneficiaries. The government has also made several relaxations for women to facilitate the participation of women beneficiaries in this scheme. Similarly, under the MSE Cluster Development Programme by Ministry of MSME, the contribution from the Ministry of MSME varies between 30-80% of the total project in case of hard intervention, but in the case of clusters owned and managed by women entrepreneurs, contribution of the M/o MSME could be upto 90% of the project cost. Similarly, under the Credit Guarantee Fund Scheme for Micro and Small Enterprises, the guarantee cover is generally available upto 75% of the loans extended; however the extent of guarantee cover is 80% for MSEs operated and/ or owned by women. Pradhan Mantri Mudra loan yojana is also favourable scheme for women in MSME sector, rural areas.