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India is a land of many opportunities. An obvious manifestation of what lies in the boom in the startup culture the country has seen in the past couple of years. Within the following guide, we record government schemes that aspiring entrepreneurs, especially any woman entrepreneur may read and avail.
From food to leisure, travelling, sanitation, IT, automobile, entertainment and perhaps even innovation, a fresh production of emerging young entrepreneurs have explored into diminished researched businesses, managed to provide choices and built the preparation for successful businesses.
And barring a couple of names which stand out, women continue to be a distinct minority in the booming entrepreneurship hubs.
While elimination, patriarchy and lack of social assistance from their own families might be a few reasons for several women, for many, the shortage of seed money and growth capital in the developmental stages is a substantial roadblock in the entrepreneurial journey of aspiring entrepreneurs.
We list down eight startup schemes introduced by financial institutions in India, like the nationalised banks to ensure that women entrepreneurs find the necessary financial assistance for their small and medium enterprises:
Under this plan, the Government of India offers term loans up to Rs. 50,000 to women entrepreneurs running food catering companies, The loaned amount may be utilized in an eligible enterprise for working capital requirements such as buying cutlery, utensils, gas connection, refrigerator, mixer cum grinder, and utensil rack, and tiffin boxes, working desk and water filter etc..
A guarantor is necessary to get this government support, also the assets of such company have to be pledged as collateral security.
After it is accepted, it ought to be paid back in 36 monthly obligations (which equates to a period of 3 years). After the loan is approved, the borrower doesn’t have to pay the EMI in the first month. The interest rate is determined based upon the business rate and the creditor involved. The State Bank of Mysore and Bharatiya Mahila Bank offer this plan.
The Stree Shakti Package is one of the superb SBI-run startup schemes for new and upcoming startups to promote entrepreneurship among women by providing specific concessions. This approach is applicable to women who’ve majority ownership (over 50%) in a small business venture. Another condition is that these entrepreneurs will need to get enrolled in the Entrepreneurship Development Programmes (EDP) organised using their individual state services as a part of entrepreneurship education. This strategy enables women to find an interest concession of 0.05 per cent on loans exceeding two lakhs. No security is needed for loans up to 5 lakh in case of small business units as a part of government support and encouragement to aspiring entrepreneurs.
This programme under the Central Bank of India may be used by aspiring entrepreneurs to fulfil the fixed capital investment needs or by existing enterprises for their working capital requirement and self-employed women for micro/small partnerships such as farming, handicrafts, food-processing, commercial production of garments, beauty, canteen, mobile restaurants, and circulating libraries, and afternoon creches, STD/Xerox stalls, tailoring etc. (in other words, agriculture, cottage industries, small and medium companies, government-sponsored applications and retail sector, commerce)
Under this plan, loans of up to Rs.1 crore are justified with a gross interest rate of 20 per cent. You do not require any security or guarantors for this specific term loan. Interest rates depend on market rates. The loan tenure will be a maximum of seven years including a moratorium period of 6 months to 1-year.
This is a general government support plan for smaller components which aspiring entrepreneurs including women can avail. Launched by nationalised banks, below are the Pradhan Mantri Mudra Yojana Government schemes that could possibly be utilized to set up a beauty parlour, lodging centre, tailoring unit, etc. Loans from Rs.50,000 up to Rs.50 lakhs are sanctioned under this scheme. No collateral security and guarantors are needed for loans under Rs.10 lakhs.
Shishu — Grants up to a max limit of Rs.50,000 as seed money to start a brand-new eligible enterprise with the interest rate being 1 percent per month or 12 per cent per annum. The repayment period is up to five years.
Kishore — Grants loans of Rs.50,000 up to Rs 5 lakhs to well-established businesses. The rate of interest fluctuates with banks as it is contingent to the business plan and credit history of the candidate. The repayment period is based on the discretion of the lending company.
Tarun — Grants loans of Rs.5 lakhs up to Rs.10 lakhs for business expansion and development. The rate of interest is based on the creditor in line with the strategic principles and credit history of the candidate. The repayment period depends on the discretion of the lending company.
To get a succinct overview of the rates for a variety of banks, check the post of Bankbazaar.
Founded by Punjab National Bank and Small Industries Development Bank of India (SIDBI), this financial assistance scheme encourages women entrepreneurs to build their own new small scale enterprises by extending loans up to Rs.10 lakh for use as seed money, such loans shall be repaid within ten years. SIDBI also includes a moratorium period. The interest will be determined by the market rates.
Under this approach, the concerned financial institution delivers different schemes providing financial assistance for beauty parlours, daycare centres, purchase of auto-rickshaws, two-wheelers, cars, etc. Additionally, it assists with capital expenditure involved in updating and modernisation of existing projects by offering growth capital.
It gives loans up to Rs.20 lakh for women entrepreneurs in agriculture, commercial production, micro-credit, retail stores, or small scale enterprises. Furthermore, it provides a concession of 0.25 percentages on interest. Loans up to Rs.50,000 are awarded to cover capital costs under the microcredit class.
This term loan has been founded by Oriental Bank of Commerce. A woman entrepreneur who asserts a 51 per cent share capital independently or jointly at a newfound enterprise, is eligible for a loan under this scheme. No security is necessary for loans from Rs.10 lakhs up to Rs.25 lakhs for smaller companies. The repayment period is seven years. Furthermore, it provides a concession of about two per cent on the interest rate.
The plan was implemented by Bhartiya Mahila Bank (BMB) which was merged with State Bank of India in 2017. A public sector small business banking company established in 2013, it supplied women entrepreneurs with business loans, with the maximum amount being. 20 Crores for meeting the working capital requirement, project cost for business development, or manufacturing units.
Furthermore, it supplies unique small business loans utilizing a lucrative rate of interest and permits collateral-free loans, the maximum amount being Rs.1 crore under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) cover.
Women entrepreneurs may also be provided 0.25 per cent concession in the rate of interest. It sports a blend of working capital and term loan. The repayment program is flexible and has to be paid back in seven years.
Shringaar – The BMB Shringaar loan is more suitable for self-employed women or homemakers who want to build a beauty parlour, purchase gear, or to match daily working capital requirements of small businesses. The loan doesn’t require that you provide any collateral security.
Parvarish – Similarly, BMB Parvarish loan is for self-employed women or homemakers to start day-care creches. The top limit of this loan is Rs.1 Crore and it is free of collateral coverage under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGSTSM) scheme.
Annapurna – Food entrepreneurs, between 18 to 60 years, attempting to start their own small scale enterprises or expand their own company existing projects might avail this loan. Its features are very much like those of the State Bank of Mysore’s Annapurna strategy, minus the fact that it does not require any collateral security coverage.
The above listing is by no means an extensive listing and there are a whole lot of schemes offered for women entrepreneurs apart from those mentioned here.
This article was first posted by The Better Indian.