There are a total of 58.5 million entrepreneurs in India, with about 8.05 million women business owners. It means that currently, women entrepreneurs only comprise about 14% of the total number of businesspersons in India. However, the situation is gradually improving as more women are establishing their own ventures and sharing their success stories.
As with any business, women entrepreneurs also require ample funds to continue the smooth operations of their ventures. Since most personal loans for self employed come with higher interest rates, business-owners require a customised solution to avail adequate financial assistance for their companies.
Following are some of the options women entrepreneurs have at their disposal.
1. Gold loan
Almost every Indian household possess some amount of gold. Since most women possess gold ornaments and jewellery, they can leverage the gold’s equity and raise funds for their business. However, they need to remember that it involves pledging gold as collateral, and the amount depends solely on the value of the gold pledged.
Business Women can, therefore, only avail the loan amount that matches the current value of the gold. Moreover, the risk of losing assets is also there if they cannot repay the loan within the specified tenor.
2. Non-banking financing companies
Women entrepreneurs can also opt for business loans for women from any reliable NBFC. Since these lenders extend lucrative and exclusive offers for women entrepreneurs, businesswomen can opt for this credit product, instead of a personal loan for self-employed.
Selected NBFCs offer business loan to women of up to Rs.45 lakh with minimal eligibility and competitive interest rates. Irrespective of the business stature, the fund should be sufficient to mitigate any financial obligation.
Along with that, they also provide pre-approved offers that make loan processing straightforward and quick. Such offers are available on a range of financial products such as personal loans, business loans, credit cards and several others. You can check your pre-approved offer within 3 seconds by entering your name and contact number.
3. MUDRA Loan
The Government of India also launched several business loans to encourage more women in business. Pradhan Mantri MUDRA Yojana is one of such initiative launched in 2015 that aims at giving SMEs and MSMEs adequate financial boost. It is one of the great sources of financing for women business persons in India.
Under this scheme, women borrowers can avail fund at every sate of their business growth. Following are the three segments that determine the loan amount.
Individuals can avail funds of up to Rs.50,000 that they can utilise to start their small business.
Under this segment, women can apply for credit up to Rs.5 lakh to expand their existing business.
Well established enterprises can avail this fund of up to Rs.10 lakh to take their business a step further.
However, they have to meet specific eligibility criteria to avail these business loans for women.
4. Annapurna Scheme
Women entrepreneurs can avail credit up to Rs.50,000 under this Government scheme. This one also aims at the improvement of agriculture sectors. One of the perks of availing this fund is that women do not have to pay the EMI for the first month after the loan approval.
However, to avail of this fund, women need to have a guarantor and also pledge collateral.
5. Udyogini Scheme
Another Government-backed business loan for women is this scheme that offers interest-free funds up to Rs.3 lakh to eligible borrowers. This scheme encompasses 88 small-scale businesses, mostly agriculture and animal husbandry. Along with that, women can also enrol to train for skill development. The government also offers up to 30% subsidy on loans for women entrepreneurs to continue their business.
However, like other Government schemes, this one also comes with specific eligibility criteria that businesswomen have to fulfil.
Thus, women entrepreneurs can do away with a personal loan for self-employed and settle for more sought-after borrowing solutions. However, for that, they first need to have concrete business ideas for women to arrange for funds. It will allow them to make the most of the credit availed.