5 Types of Business Loans to Empower Women Entrepreneurs

By Akshay Sharma December 1, 2021 Finance

According to the Sixth Economic Census and the Ministry of Statistics and Programme Implementation report, approximately 14% accounts for women entrepreneurship in the country. With these statistics, it has been evaluated that nearly 8.05 million women are entrepreneurs. It has been estimated that by the end of 2030, more than 30 million organisations will be registered entirely by women. This will further create additional 150-170 million job opportunities for the citizens of India.

Therefore, to encourage and motivate women entrepreneurs in the country, various business loans for women are exclusively available to assist them in maintaining their business efficiently.

5 types of business loans for women entrepreneurs

As per National Policy for Skill Development and Entrepreneurship, encouraging women entrepreneurship is the primary objective. To do so, a loan for women has been launched by different financial institutions.

Here, individuals can find some of the top business loan options to help female entrepreneurs to establish and grow their organisations.

1. Mudra Yojana Scheme

Under the Pradhan Mantri Mudra Yojana and with the support of the Government of India, the Mudra Yojana Scheme has been introduced to provide financial assistance to female entrepreneurs. To encourage the MSMEs and SMEs, various loan schemes are offered to women and support upcoming female entrepreneurs. One of the significant advantages of these schemes is that they are free from collateral and offer up to Rs.10 lakh financial assistance. Under this scheme, the loan amount sanctioned ranges from Rs.50,000 to Rs.10 lakh. Under this, there are three plans, namely-

Shishu ( Loan amount up to Rs.50,000)
Kishore ( Loan amount ranging from Rs.50, 000 – Rs.5 lakh)
Tarun ( Loan amount ranging from Rs.5-10 lakh)

Borrowers must note that the interest rate of the sub-schemes mentioned above depends on their credit history, financial institution regulations, and scheme guidelines.

2. Pradhan Mantri Rozgar Yojana

The Pradhan Mantri Rozgar Yojana is an effective scheme offered to female entrepreneurs to assist them financially. This scheme encompasses all the business options available comprising agriculture. It primarily provides a subsidy of 15% of the project cost and the maximum amount of Rs.12,500 per head. One can avail collateral-free loans of up to Rs.1 lakh under this scheme.

The business loan for women offered under this scheme for the business sector is Rs.2 lakh, and for start-ups and services, the amount provided is up to Rs.5 lakh.

3. Commercial business loan

If an individual seeks an instant business loan for his/her existing organisation, it is wiser to opt for commercial business loans. This type of credit is ideal for medium-scale businesses that want to diversify their operations. This type of financing option does not demand any collateral and few lenders offer instant online application and approval depending on the borrower’s eligibility.

These commercial business loans for women are usually offered to organisations that have an authentic business validation.

4. Loan against securitie

If an individual is planning to establish a small business, one of the effective financing options is the loan against securities. With this financing option, one can pledge their investments in the stock market, life insurance policies or mutual funds to borrow a substantial loan amount.

5. Udyogini scheme

This scheme has been introduced to financially support female entrepreneurs residing in rural areas and underdeveloped areas. This scheme was initiated by the Women Development Corporation by various financing options. Individuals with a family income of Rs.1.5 lakh or less per annum can avail credit under this scheme.

Apart from knowing about these schemes and financing options, individuals need to know about the eligibility parameters and the documents required for a business loan to ensure faster approval.

On the other hand, if consumers require a loan for meeting personal expenses, they can consider opting a personal loan for self employed from reputed financial institutions like Bajaj Finserv at competitive interest rates and flexible repayment terms.

These financial institutions also extend exclusive pre-approved offers for eligible borrowers that streamline and expedite the loan application procedure. These offers are available on a wide range of financing options, such as business loans, personal loans, credit cards etc. Therefore, individuals can check their pre-approved offers by mentioning their essential credentials.

Funding is one of the essential aspects to run a business. But with the availability and accessibility of different loans for women, aspiring women can overcome these challenges significantly.