Mar 07 • 5 mins read
Loans for Women to Start a Business in India
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To make the Indian economy grow consistently by 9 to 10 per cent in the next three decades, we must work towards creating ecosystems that support all kinds of women entrepreneurs, however, according to the Sixth Economic Census, only about 14 per cent of women in India own businesses.
The problem of low female entrepreneurship rates is attributed to the lack of business loans for women. But the good news is that there are many initiatives by the government and independent financial firms that will provide loans for women to start a business in India.
Let’s understand the business landscape for women and how business funding for women works.
Problems Faced by Women Entrepreneurs in India
Indian society has a patriarchal setup. Therefore, women entrepreneurs in India face several challenges that include:
- Peer Aggression
Women entrepreneurs are often patronised by their peers. The aggressive and assertive behaviour expressed by the peers is often detrimental to the enterprising spirit of a woman.
In India, the enterprising desire of a woman is seen as a disadvantage, with questions being raised about their competitiveness and ability. Time and again, Indian women have broken these stigmas, but society is yet to experience a comprehensive mindset transformation where women are treated as equal in social, economic and political setup.
Indian women are brought up in a sheltered way. This snatches them the opportunity to learn the ways of the world. They grow up to be timid and of trusting nature, which can be a disadvantage when the need is to be a shrewd business owner.
Women entrepreneurs turn up to be an isolated breed in a male-dominated business environment. It is difficult for most women business owners to join business networks and socialise professionally.
- Personal Responsibilities
Women entrepreneurs are not only responsible for their business; they also are inherently responsible for managing the household. This is a big disadvantage when compared to their male counterparts.
- Safety and Security
Women safety is a major concern in India. Since women entrepreneurs may need to work at odd hours and travel to new places, ensuring safety could be a problem.
Government Loan Schemes for Women Entrepreneur
Government sector funding for women is feasible since they usually have longer repayment periods and a lower rate of interest. However, women prefer non-government loans to avoid backing up their appeal with multiple documents, which may lead to increased paperwork.
Here are the top government sector bank loans for women:
- Stree Shakti Package for Women Entrepreneurs –Offered by most of the SBI branches, this scheme is available to women who have a 50% share in the ownership of a business or have participated in EDP (Entrepreneurship Development Programmes) run by state agencies. The scheme also discounts the rate of interest by 0.05% on business loans for women if the loan amount is more than ₹2 Lakh.
- Shringaar and Annapurna –Bhartiya Mahila Bank offers a wide range of loans to help women entrepreneurs to set up a new business or expand an existing one. Two popular collateral-free loans for women options are Shringaar and Annapurna. The Shringaar loan is for women wanting to set up beauty parlours, and the Annapurna loan scheme offers financial support of up to ₹50,000 to women wanting to start a food catering business.
- Cent Kalyani Scheme –Cent Kalyani Scheme offers small business loans for women who are either self-employed or involved in the cottage and village industries, small and medium enterprises, agriculture, retail trade, or government-sponsored programs.
- Mahila Udyam Nidhi Scheme –Launched by Punjab National Bank, this scheme offers business funding for women that can be repaid within 10 years. It has different plans for daycare centres, beauty parlours, purchase of two-wheelers, cars, auto-rickshaws, etc.
- Shakti Scheme –The Dena Shakti Scheme offers loans of up to ₹20 Lakh for women entrepreneurs in the field of manufacturing, retail stores, agriculture, micro-credit, or have a small enterprise. The scheme offers a concession of 0.25 per cent on the interest rate. Under the microcredit category, women entrepreneurs can get a loan of up to ₹50,000.
- Udyogini Scheme –This government-initiated scheme is for the welfare and development of Indian Women Entrepreneurs. The scheme was introduced to promote and motivate women entrepreneurship among the poor. The scheme provides financial support to illiterate women living in rural and economically backward areas.
Business Grants from International Organisations and NGOs
There are a number of international organisations that offer small business grants for women. If you’re a social entrepreneur or your startup business has a social motive, you can apply for grants from international organisations. Understand them below:
- The Ashoka Fellowship –If you have innovative ideas that can improve lives and transform society, you can apply for the Ashoka Fellowship. For entrepreneurs committed to social good, it offers a tailored stipend for up to 3 years.
- Skoll Foundation –Skoll Foundation supports large-scale change by offering grants to social innovators and entrepreneurs. It also connects social entrepreneurial organisations across the world.
- Ford Foundation –The Ford Foundation offers grants to entrepreneurs as well as organisations for several needs.
Non-Government Entrepreneurs Loan
Non-government or personal loans are a great source of business funding for women. Personal loans vary in terms of interest and repayment periods. But a great advantage about them is that you do not need to present collaterals such as your car, home, business, or any valuable property.
You can get a personal loan from an accredited financial firm, a bank or an online lender where you have to pay fixed monthly instalments. If you have a fixed source of income or good credit history, a personal loan for business is a great option.
Business Funding for Women through MoneyTap
MoneyTap is India’s first personal credit line that boasts an easy application process, minimum documentation, and quick approval. It offers a credit line of up to Rs 5 Lac and allows small withdrawals as per your business requirements. However, these are not the only features that make MoneyTap popular; another great advantage is that it requires you to pay interest only on the amount used.
Benefits of Getting MoneyTap’s Loans for Women for Business
The key benefits of MoneyTap’s small business loans for women include:
- Unbiased loan process: MoneyTap believes in economic progress and does not succumb to social stigmas, gender or race bias. Your loan application, approval, verification, and disbursal will be completely based on whether you meet our eligibility criteria.
- Quick disbursement: MoneyTap approves your loan within 4 seconds, and the disbursement happens in the next few days. You don’t have to wait for months or weeks to put your business plan into action or take advantage of a business opportunity that comes your way.
- Collateral-free: MoneyTap offer collateral-free loans. This means you do not have to pledge your valuable assets to get a loan through us. We also don’t interfere with how you run your business. This gives you total control over your business.
- Reduce cash flow risks: With a loan through MoneyTap, women entrepreneurs can reduce the fluctuations and maintain a steady cash flow.
- Get funds on the go: Business loans for women through MoneyTap ensure that you can quickly access funds at any time from anywhere.
- Flexibility in repayment: With a flexible loan tenure ranging from 2 months to 36 months, you can easily repay the loan in easy EMIs set according to your repayment capacity.
Best Business Ideas for Women
We believe women can do everything that they set their minds to because they are inherently organised, dedicated, and multi-talented with phenomenal multi-tasking skills. However, there are certain areas that they naturally excel at. Some of the potential business ideas that women already have the knowledge and experience include:
- Educational services
- Skincare and beauty
- Home, life, & financial organisation
- Event planning
- App development
- Caring for children/animals
- Food and catering
If you have zeroed in on your business idea, the next step is to apply for a loan with MoneyTap. Applying for a MoneyTap’s personal loan for women is easy. All you have to do is download the app, enter your KYC details, and make a request to get instantly approved. Download the app today and bring your entrepreneurial dream to reality.
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