Women entrepreneurs in India are breaking barriers every day. However, they continue to face significant challenges in accessing funding and resources. Despite the Government’s efforts to support women-led enterprises, many women remain unaware of the financial schemes for women entrepreneurs. This knowledge gap prevents them from taking full advantage of available opportunities.
The Reserve Bank of India’s Innovation Hub (RBIH) released a report titled “At the Helm: Women Entrepreneurs Transforming Middle India.” This report focuses on the challenges women entrepreneurs face in Tier II and Tier III cities. Despite progress in education and workplace policies, women’s entrepreneurship remains low, primarily due to a glaring capital gap. The report highlights that only 3% of surveyed women accessed external funding like bank loans or equity investments.
Lending institutions often consider women less creditworthy due to a lack of collateral, as many women do not own assets. While the Government offers multiple loan schemes to empower women entrepreneurs, the information often doesn’t reach those who need it. The solutions for better financial inclusion exist, but their impact remains limited by poor outreach.
6 financial schemes for women entrepreneurs
Several financial schemes aim to address the funding challenges faced by women entrepreneurs in India. Below, we highlight six impactful initiatives every woman entrepreneur should know about:
1. Women Entrepreneurship Platform (WEP)
The Women Entrepreneurship Platform (WEP), incubated at Niti Aayog, is a public-private partnership that supports women entrepreneurs in India by creating an enabling ecosystem. As part of its Financing Women Collaborative (FWC) initiative, WEP focuses on improving access to finance for women-led ventures. The platform connects women with business experts, investors, and fellow entrepreneurs, offering a one-stop hub for guidance and resources to grow their businesses.
2. Pradhan Mantri Mudra Yojana (PMMY)
The Pradhan Mantri Mudra Yojana (PMMY) introduced a unique initiative for women entrepreneurs, known as the Mudra Yojana Loan Scheme or Mahila Udhyami Yojana. This program offers loans of up to ₹10 lakh without collateral, with low interest rates and flexible repayment terms. The scheme is divided into three categories to cater to businesses at different stages:
- Shishu Loan: Offers up to ₹50,000 for start-ups and new businesses.
- Kishor Loan: Provides ₹50,001 to ₹5,00,000 for purchasing raw materials, machinery, or expanding existing businesses.
- Tarun Loan: Grants ₹5,00,001 to ₹10,00,000 for established enterprises looking to scale further.
As of November 24, 2023, 306.4 million loans under PMMY had been disbursed, with women accounting for 69% of the sanctioned loans.
3. Stand-Up India (SUPI)
The Stand Up India scheme aims to provide bank loans ranging from ₹10 lakh to ₹1 crore to at least one Scheduled Caste (SC), Scheduled Tribe (ST), and one woman borrower per bank branch to set up a greenfield enterprise. For non-individual enterprises, at least 51% of the shareholding and controlling stake must be owned by an SC/ST or woman entrepreneur. The business must operate in manufacturing, services, trading, or agriculture-related activities.
The loan tenure can last up to 7 years with a maximum moratorium period of 18 months. As of November 24, 2023, out of the 209,000 loans sanctioned under Stand-Up India, 84% (or 177,000 loans) were granted to women entrepreneurs, reflecting the scheme’s focus on empowering women in business.
4. The Cent Kalyani Scheme
The Cent Kalyani Scheme offers women entrepreneurs the tools and resources to start new ventures or expand existing businesses. Open to both new and existing women entrepreneurs who own micro or small enterprises as defined by the MSME Act of 2006, this collateral-free loan scheme requires no third-party guarantee. Under the scheme, women can secure loans of up to one crore with zero processing fees.
5. Mahila Samriddhi Yojana
The Mahila Samridhi Yojana is a microfinance scheme to support women entrepreneurs from low-income or backward communities in starting or expanding their businesses. The scheme offers loans for projects costing up to ₹1,40,000, with the National Scheduled Castes Finance and Development Corporation (NSFDC) providing up to 90% of the project cost, capped at ₹1.25 lakh.
The loan must be repaid in quarterly instalments over a maximum period of three years, including a 3-month moratorium. To qualify, women must belong to backward classes, as defined by the Government, and have a family income of less than ₹3 lakh per year.
6. Dena Shakti Scheme
The Dena Shakti Scheme, now supported by the Bank of Baroda after the merger with Dena Bank, offers loans up to ₹20 lakh for women entrepreneurs in sectors like agriculture, retail trade, education, and housing. The scheme also provides a concession of 0.25% on the interest rate for women under the Nari Shakti loan category.
Additionally, women can avail of loans up to ₹50,000 under the microcredit category for small-scale businesses. The margin for the loans is set according to the guidelines from the RBI and banks, which may change periodically.
Why spreading awareness about financial schemes for women entrepreneurs matters
Despite the availability of these schemes, a lack of awareness remains a significant barrier. According to the EdelGive Foundation Report, only 11% of women entrepreneurs are aware of these initiatives, and only 1% have accessed them. This gap highlights the urgent need for better communication and outreach to ensure women entrepreneurs can leverage these resources.
At ChangeinContent, we advocate for closing this information gap. By increasing awareness about these financial schemes, we can empower more women to break through systemic barriers and thrive in their entrepreneurial journeys.
The final thoughts
Access to financial support is crucial for women entrepreneurs to achieve their goals. However, without proper communication and education about available resources, many women are left behind.
At ChangeinContent, we are dedicated to championing the causes of women entrepreneurs. By highlighting and advocating for these initiatives, we aim to build a more inclusive and equitable entrepreneurial ecosystem. Together, we can create opportunities for women to lead, innovate, and inspire change.
Disclaimer: The views expressed in this article are based on the writer’s insights, supported by data and resources available both online and offline, as applicable. Changeincontent.com is committed to promoting inclusivity across all forms of content, which we define broadly to include media, policies, law, and history—encompassing all elements that influence the lives of women and gender-queer individuals. Our goal is to promote understanding and advocate for comprehensive inclusivity.
