Government Loan Schemes Empowering Women Entrepreneurs

In today’s fast-paced world, women are breaking all the barriers set upon them by a patriarchal society, which has been pulling them behind in achieving their dreams. Like never before, they have stepped into the world of entrepreneurship and business.  

However, one of the challenges that women entrepreneurs face is securing the right amount of funding to turn their dream of running a business into reality.  

To address this, government organizations worldwide are introducing certain loan schemes for women to give a financial boost and support to budding women entrepreneurs.  

These loan for women schemes empower women by providing them with the right tools to help them thrive in the competitive business world.  

List of Government Loan Schemes for Women Entrepreneurs in India 

Access to capital funds is the key to breaking into the business world. The initiative to promote financial literacy for women is a great step towards helping them understand the nooks and crannies of business finances and cementing their chances of success in the future.  

In countries like India, there are different government schemes to empower women entrepreneurs with financial aid. Here are a few of those schemes in India.  

1. Mudra Yojana 

Pradhan Mantri Mudra Yojana (PMMY) is a huge scheme providing collateral-free finance to micro and small women entrepreneurship units. It is offered in three forms depending on loan size: 

– Shishu: Small loans of Rs. 50,000 for start-ups. 

– Kishore: Rs. 50,000 to Rs. 5 lakh loans to small and medium enterprises to expand. 

– Tarun: Rs. 5 lakhs to Rs. 10 lakh loans to expanding businesses. 

Loans are being used to fund various kinds of business operations, including the purchase of machinery, production enhancement, and working capital.  

PMMY has been very helpful in supporting women’s entrepreneurship across various industry segments. 

2. Stand-Up India Scheme 

The Stand-Up India Scheme aims to enable women, SCs, and STs to become entrepreneurs by financing them through banks for Rs. 10 lakh to Rs. 1 crore. The scheme mainly targets the manufacturing, services, and trading sectors. 

Under this scheme, every bank branch is obligated to approve at least one loan to a female entrepreneur.  

The scheme also provides financial literacy training and entrepreneurship counseling to enable women to become successful in their business enterprises. 

3. Mahila Coir Yojana  

The Mahila Coir Yojana is a financial and skill-upgradation scheme for rural women engaged in the coir industry. The scheme offers: 

– Coir processing training courses. 

– Finance support of up to 75% of equipment expenses to facilitate women to establish coir-based entrepreneurial ventures. 

Apart from creating employment, the scheme also preserves and encourages India’s traditional coir industries. 

4. Credit Guaranteed Fund Trust for Micro and Small Enterprises (CGTMSE) 

CGTMSE’s fund-based scheme also extends collateral-free finance to women-owned MSEs of women entrepreneurs. The scheme gives the discipline of lending without third-party guarantees or collateral from banks and NBFCs. 

Definition of CGTMSE: 

– Finance of up to Rs. 2 crore is insured under the scheme. 

– Compelling banks and NBFCs to offer finances to women entrepreneurs without fear. 

– Offers credit guarantee cover of 75% to 85% of the loan, lessening lender financial risk. 

5. Udyam Shakti Portal 

The Udyam Shakti Portal is a standalone online portal that was introduced to empower women entrepreneurs. It is a single-point information portal that offers:

– Information on government schemes and eligibility. 

– Facilitation of business registration and compliance. 

– Information on financial assistance and skill development schemes. 

– Business and market access growth guidance. 

6. Economic Empowerment of Women Enterprises and Start-up by Women  

This scheme is aimed at empowering women-owned start-ups and businesses by: 

– Capacity-building schemes for enhanced business skills. 

– Financial support to propel growing businesses. 

– Mentorship and networking services to reach women entrepreneurs to industry leaders and investors. 

The program gets women on India’s entrepreneurial economy board through economically and entrepreneurially empowering women. 

7. Trade-Related Entrepreneurship Assistance 

The program aims to encourage women’s involvement in trade and commerce through the following: 

– Financial assistance to young and veteran entrepreneurs. 

– Business training to facilitate preparation of operation and marketing strategies. 

– Access to domestic and foreign markets to empower women entrepreneurs to expand their outreach. 

Challenges Faced by Women Entrepreneurs 

According to the World Economic Forum, India is on the path to improving its gender parity ratio.  

However, as per the Global Gender Gap Report, it is still at a lower rank. So, let’s examine the problems or challenges that women are facing in the business world.  

• Limited Finance  

According to an IFC report from 2022, about 90% of women entrepreneurs in India do not borrow from any financial institution.  

During the lockdown period, 53% of male entrepreneurs lacked financial reserves, resulting in female-led enterprises on a higher trajectory of 72%.  

• Access to Professional Networks 

Another challenge that women entrepreneurs are facing in countries like India is the lack of access to professional networking.  

According to the Google-Bain survey, about 49% of the respondents lack experience with professional support, which restricts them from formal or informal networking.  

• Family Duties 

Women in patriarchal societies are expected to fulfill their duties as household caretakers regardless of their professional commitments.  

Juggling both these roles is becoming a significant challenge in achieving their dreams.

It is time that women start questioning these gaps in gender equality, creating a barrier for them from becoming a superwoman.  

Bottom Line! 

The Indian government’s loan schemes for women entrepreneurs are probably one of the best things that are helping women become empowered!

The country has taken a giant leap forward through these schemes of banking and skill development.  

Through credit, training, and market exposure, the schemes have economically empowered women, given them financial independence, and removed social barriers.