Are you a self-employed woman or entrepreneur and looking for funds to start your own business, meet urgent day-to-day business requirements or for business expansion purposes? If yes, then you are about to gain some really helpful information related to it.
In today’s financial market, self-employed women are privileged to avail business loans at competitive and sometimes, at concessional interest rates, along with low processing fees from various lending institutions. Women Entrepreneurs can avail startup loans, business loans or MSME loans from various private and public sector banks, NBFCs, as well as loans offered under several Govt. loan schemes. Besides knowing the various loan schemes offered by financial institutions, you should also be aware of the relevance of your credit score in your loan approval process.
Your Credit Score and its Relevance
Your credit score is a 3-digit numeric generated by credit bureaus ranging from 300 to 900 that depicts your creditworthiness. Usually, any score above 750 is considered healthy, as it helps in enhancing the chances of your loan approval. Your good credit score marks you as a credit–responsible borrower in the eyes of most of the lenders. Higher your credit score is; more are the chances of your business loan approval. Therefore, you should regularly check your free credit score offered by various online platforms.
Read on to learn about the best loan schemes for women entrepreneurs offered by banks and various government institutions.
Best Business Loan Schemes for Women Entrepreneurs – 2024
PNB Mahila Udyami Scheme
Purpose: Loan scheme for offering funds to women for any income generation activity.
Eligibility Criteria: Any individual (women), women entrepreneur(s) or enterprise where women entrepreneurs hold not less than 50% of financial holding are eligible.
Features:
•Nature of loan: Term Loan and Overdraft
•Loan Amount: Up to Rs. 10 lakh
•Repayment Tenure: Minimum 3 years to 5 years with a maximum moratorium period of 3– 6 months
•Security: Primary Security: Personal security of the borrower / asset created by the bank finance
•Collateral Security: NIL, to be covered under CGTMSE for eligible activities
Purpose: To meet day-to-day requirements, such as the purchase of plant & machinery/equipment, etc., and working capital expenditure.
Nature of Loan: Term Loan fund-based working capital facility
Features:
•Interest Rate Range: 8.95% p.a. onwards
•Loan Amount: Up to Rs. 100 Lakh
•Collateral/Security or Third Party Guarantee: Not required, as covered under the Guarantee cover of CGTMSE
•Processing Fee: Nil
•CGTMSE Coverage: Available
ICICI Bank – Self Help Group-Bank Linkage Programme (SBLP)
Recently, ICICI Bank has initiated the Self Help Group-Bank Linkage Programme (SBLP) in which financial products & servicesare offered to the section of society that lacks access to formal banking.
Features & Eligibility Criteria:
•Interest rate: Minimum 7% p.a. and maximum 22.85% p.a.
•Minimum existence of an SHG should be at least 6 months
•Minimum Savings of Rs. 5,000 per person
KBL Mahila Udyog Loan from Karnataka Bank
KBL Mahila Udyog Loan is offered only to women entrepreneurs to meet urgent funds requirements for any income–generating activities.
Eligibility Criteria:
Minimum of 51% of the shareholding and controlling stake needs to be held by women borrowers in a firm or company. Individuals (Women Entrepreneurs) and Self–Help Groups are eligible to avail funds under the KBL Mahila Udyog Scheme.
Features:
•Interest Rate: 10.41% p.a. onwards
•Loan Amount: Up to Rs. 10 Lakh for Term loan and Rs. 2 Lakh for Working Capital Loan
•Repayment Tenure: Up to 120 months for Term Loan and 12 months for Overdraft
•Security: Hypothecation of assets created with Bank finance or CGTMSE coverage wherever permissible
•Margin: 15% – 30%
Note: The above-mentioned interest rates and features of each loans scheme are general in nature and shall vary or change,as per the sole discretion of the respective bank and RBI.
Government Loan Schemes for Women Entrepreneurs
You can avail short-term and long term, as well as collateral/security–free business loans under various loan schemes initiated by the Indian Government at lower interest rates to start your own business or to meet day-to-day business requirements. Find below the leading loan schemes that may help you in availing hassle-free business or MSME loans with minimum documentation:
•Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY)
•PSB Loans in 59 minutes (psbloansin59minutes.com) under SIDBI
•Loans under Stand-Up India Scheme
•Funds under Pradhan Mantri Rozgar Yojana (PMRY)
•Loans under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
•Loans under Prime Minister’s Employment Generation Programme (PMEGP)
Note: Please visit the official website of the above-mentioned Govt. schemes to get more loan–related information.
Recommendations:
If you are planning to opt for any type of business loan, then you should maintain a healthy credit score or CIBIL score to be eligible for it. The minimum CIBIL score required by lenders may differ; however, you should maintain at least 700 to avail small business loans, or short-term loans to meet your urgent business requirements. Also, make it a practice to regularly check your credit score for errors and rectify them at the earliest. A healthy credit score shall definitely help you in availing business loans at attractive interest rates with a relatively longer repayment tenure.
