Entrepreneurship ventures or startups are definitely not considered nowadays as new business concepts in India. In order to impetus further growth of entrepreneurial initiatives, leading Private, and Public Sector Banks, NBFCs have introduced various business loan schemes for women entrepreneurs. Few and selected lenders also offer business loans and working capital loans at concessional interest rates to women entrepreneurs. Let’s now take a look at the 5 most popular loan schemes for women entrepreneurs in India offered by financial institutions.
Business Loan Schemes for Women Entrepreneurs
1. Cent Kalyani from the Central Bank of India
Central Bank of India offers business and startup loans for women entrepreneurs who are looking to open a new business or want to expand or alter their current one.
Features:
- Interest Rate Range: 8.70% p.a. – 8.95% p.a.
- Interest Rate for Loan up to Rs. 10 Lakh: 8.70% p.a.
- Interest Rate for Loan above Rs. 10 Lakh and up to Rs.100 Lakh: 8.95% p.a.
- 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 – Overdraft/ Cash Credit non-fund-based working capital – Letter of Credit/ Letter of Guarantee, etc.
- Loan Amount: Up to Rs. 100 lakhs
- Processing Fee: Nil
- CGTMSE Coverage: Available
- Collateral/Security or Third Party Guarantee: Not required, as covered under the Guarantee cover of CGTMSE
- Insurance: Comprehensive insurance of stock, machinery/equipment, etc with a bank clause
- Women entrepreneurs who are rendering services to rural and cottage industries, MSMEs, and women working in the farming, retailing, and government-backed firms can avail business loan
Note: Bank’s 1-year MCLR stands at 8.45% & Additional Interest concession of 0.25% on the interest rate if an account is rated by an external agency.
2. Mudra Loan under PMMY
Launched in 2015, MUDRA Loan under Pradhan Mantri Mudra Yojana (PMMY) is a loan scheme offered by banks for individuals, startups, and business owners, as well as women entrepreneurs across India. Under this scheme loan amount up to Rs. 10 lakh are offered to women who want to start their own business or expand the existing one. The loan amount is offered under three categories named Shishu, Kishor, and Tarun. Find below the basic features of the loan scheme offered by banks and NBFCs under the Mudra Yojana:
Features:
- Concessional Interest Rates for Women Entrepreneurs
- Collateral-Free Business Loans: No collateral or security is required by banks or NBFCs
- Loan Type: Term Loan / Overdraft
- 3 Loan Categories: Shishu, Kishor, and Tarun
- Loan Amount: No minimum limit and maximum up to Rs. 10 lakh
- Repayment Tenure: Up to 5 years
- Processing Fee: Nil to 0.50% of the sanctioned loan amount
- Loans for Women living in both Urban and Rural regions of India
Mudra loans are offered to women to encourage women entrepreneurs and to promote the MSME sector.
Latest Business Loan Interest Rates
| Bank/NBFCs | Interest Rate | |
| Axis Bank | 10.75% p.a. onwards | Apply Now |
| Flexiloans | 1% per month onwards | Apply Now |
| HDB Financial Services Ltd. | 8% - 26% p.a. | Apply Now |
| HDFC Bank | 10.75% - 25% p.a. | Apply Now |
| IDFC First Bank | 10.50% p.a. onwards | Apply Now |
| Indifi | 1.50% per month onwards | Apply Now |
| Kotak Mahindra Bank | 16% - 26% p.a. | Apply Now |
| Lendingkart | 12% - 27% p.a. | Apply Now |
| Mcapital | 2% per month onwards | Apply Now |
| NeoGrowth Finance | 15% - 40% p.a. | Apply Now |
| Tata Capital | 12% p.a. onwards | Apply Now |
| UGRO Capital | 9% - 36% p.a. | Apply Now |
3. ICICI Bank – Self Help Group-Bank Linkage Programme (SBLP)
ICICI Bank has recently introduced Collateral-free business loans for Self Help Groups (SHGs) of 10-20 women. The maximum loan amount offered under this scheme is Rs. 10 lakh with a repayment tenure of up to 3 years.
Eligibility Criteria
- Minimum existence of SHG should at least 6 months
- Group of 10-20 women are eligible to avail funds
- Minimum Savings/Corpus of Rs 5,000 is required
Features:
- Interest Rate: Up to 21.50% p.a.
- Purpose of Loan: Business expansion, and income generation and livelihood activities
- Loan Amount: Up to Rs. 7.5 lakh for customers of other Banks and up to Rs. 10 lakh for ICICI Bank customers
- Collateral-free loans
- Repayment Tenure: Up to 36 months
4. Stand-Up India
Stand Up India is a loan scheme initiated by the Govt. to offer credit facilities for setting up Greenfield Enterprise for a loan amount of Rs. 10 lakh to Rs. 1 crore.
Features:
- Interest Rate: (Base Rate + (MCLR) + 3% + Tenor Premium)
- Repayment Tenure: Up to 7 years, including a moratorium period of 18 months
- Working Capital limit above Rs. 10 lakh to be sanctioned by the way of Cash Credit limit
- The specification of the loan is expected to cover 85% of the project cost. However, it will not be applicable if the borrower’s contribution along with convergence support comes from any other schemes that exceed 15% of the project cost
- Collateral: Required as primary security or guarantee of Credit Guarantee Scheme for Stand-up India Loans (CGFSIL)
5. PNB Mahila Udyami
Nature of loan in Term, Loan and Working Capital Loan. Business loan scheme of up to Rs. 10 lakh for new & existing units with tenure of 3-5 years (Term Loan) and 3 years (Overdraft Facility) with moratorium period of 3-6 months depending upon type of activity and income generation. The Margin up to Rs. 2 lakh is Nil, above Rs. 2 lakh – Rs. 5 lakh is 20% and Above Rs. 5 lakh to Rs. 10 lakh is 25%.
Eligibility Criteria:
- Any individual women/ women entrepreneur (s)/ Enterprise where women entrepreneurs hold not less than 50% of financial holding. However, preference will be given to women belonging to ST/SC/BPL Card Holders
- Categories of women entrepreneur strained in R-SETIs/ Skill Development Institutions etc. any other training institute are given more preference
- Applicant shopuld not be a defaulter to any Bank / Financial Institution
- Loan facility availed by the beneficiaries under Govt. scheme are not eligible
Small Business Loans for Women: Features
- Interest Rate: Discounted or concessional interest rates for Women Borrowers that shall vary from bank to bank
- Loan Amount: No Minimum Limit, Maximum Loan Amount Up to Rs. 10 lakh, may exceed
- Repayment Tenure: From 12 months to 5 years
- Collateral/Security or Third-party Guarantee: Not required
- Loan Type: Term Loan (Short or Long term), Unsecured loan, Working Capital Loan, Overdraft
Eligibility Criteria
- Age Criteria: Min. 18 years and Max. 65 years
- Applicants with no past loan defaults shall be considered
- Individuals, MSMEs, Sole Proprietorships, Partnership Firms, and Limited Liability Partnerships (LLPs), engaged in the trading, manufacturing, and services sector are eligible
- Annual Turnover: To be defined by the bank or lender
Documents Required for Loan Application
- Duly filled application form with 2 passport-size photos of the applicant
- Self-written Business Plan
- Identity Proof – Driving License, Voter ID Card, PAN card, Passport, Aadhaar card, etc.
- Address Proof: Passport, Utility Bills, Aadhar Card, Voter’s ID card
- Income Proof: Last 6 months’ bank statement, Salary Slips, Bank statement
- Business Incorporation Certificate
- Any other document required by the lender
Additional Loan Scheme for Women Entrepreneurs
KBL Mahila Udyog Loan from Karnataka Bank
KBL Mahila Udyog Loan is offered only to women entrepreneurs to meet credit requirement for any income generating activities. Minimum of 51% of the shareholding and controlling stake is held by women borrowers in a firm or company. This loan is offered exclusively to women and the maximum loan amount offered is Rs. 10 lakh (Rs. 2 lakh for working capital loan). Below listed is the loan details for further information:
Loan Highlights
- Interest Rate: 11.94% p.a. onwards
- Loan Amount: Term Loan of up to Rs. 10 lakh & Working Capital Loan up to Rs. 2 lakh
- Repayment Tenure: OD: 12 months, Demand Promissory Note (DPN) up to 34 months & Term Loan Up to 120 months, including moratorium period
- Margin: 15% – 30%
- Collateral/Security: Hypothecation of assets created with Bank finance, Secondly, loan shall be covered under CGTMSE scheme, wherever permissible
FAQs
Q. How can a woman apply for a small business loan?
Ans. Women borrowers can visit the official website of the bank to apply or can personally visit the bank to perform loan formalities. Secondly, the women applicants can check and compare various business loan options at competitive interest rates.
Q. What loans are available for women to start a business?
Ans. Business loans for women come in almost every type that can be used by applicants like MSME loans, business loans, working capital loans, term loans, etc.
Q. What loan options are there to start a small business for women?
Ans. Small Business Loans or Micro Finance lending is offered by various NBFCs, Micro Finance Institutions (MFIs), Small Finance Banks (SFBs), Regional Rural Banks (RRBs), Co-operative Banks, etc. at concessional interest rates.
Q. What are the government loans for women to start a business?
Ans. Women entrepreneurs can apply for business loans under various Govt. loan schemes like Mudra Yojana, PMEGP, CGTMSE, Startup India, Standup India, psbloansin59minutes.com, etc.
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89 Comments
I am Ashu. Age 25, female
I work in a Private Export house,
But want to start my own food catering business. Please suggest me the best loan way I can take it.
Thank you
Hello Ms. Ashu,
Its good to start a food catering business as it has scope and margins. To avail a business loan to start a new business you can approach PMMY for MUDRA loan, Startup India, Standup India and also you can directly reach for private and public sector banks like SBI, HDFC, ICICI, Axis bank, Bank of Baroda, PNB, etc. If the loan amount is less than Rs. 10 lakh then MUDRA loan is best or else you can also get loan from NBFCs, Regional rural banks, Small Finance Banks and Micro Finance Institutions. The business loan interest rate will depend on the loan amount and shall vary from bank to bank.
Thanks.
i am already doing food product business , having vending machine producing Groundnut/Coconut/Gingely Oils and doing turnover around 10 Lacs per annum. pl. advise , which loan i should go for expansion with subsidy-women enterprenuer scheme ( required 5-10 Lacs loan). pl. advise
Hi Ms. Sheela,
As you are already running a business, it shall be easy for you to get business loan at attractive interest rates. To avail special loans specifically designed for women, you can simply reach out for banks like Central Bank of India, Bhartiya Mahila Bank, Bank of Baroda, PNB, etc. They shall offer you discounted interest rate with flexible repayment options. The required loan amount of Rs. 10 lakh can be offered by any of these banks. just you have to present all the required documents, including business plan, credit report, financials, ITR, Sales tax returns, income proof, KYC documents and others as other as defined by the chosen bank.
Thanks.
Hi,
I am Anshu an MBA graduate. I want to start new business of hand wash and sanatier. For this I have requirement of ₹5 lakh.
Kindly let me know, were I can loan as earliest possible.
Hi Anshu,
To meet the working capital or business loan requirement of starting a sanitizer or hand wash production unit, you can apply for MUDRA loan under ‘Kishor’ loan scheme offered by several banks under Pradhan Mantri Mudra Yojana (PMMY). For the loan amount of up to Rs. 5 lakh, you can avail latest MSME loans introduced by Government of India under Atm Nirbhar Abhiyan or Self-reliant India Scheme 2020. Rest, you can also contact private and public sector banks or NBFCs to get business loans at attractive interest rate.
Thanks and Best of Luck for your venture.
I am a housewife and good experience in catering. I am differently abled person. Can I get the loan and explain
Hi Preethi,
Its good that you want to start a catering business, it does not matter if you are differently abled. You can easily apply for any loan you want. To start a catering business, you can approach any private or public sector bank for a business loan or MSME loan. Banks like SBI, HDFC, ICICI, Axis Bank, Bank of Baroda, Punjab National Bank, Canara bank, etc. can offers you loan to start catering business. The loan amount can range anywhere between Rs. 50,000 lakh to Rs. 10 lakh under Mudra loan category. The interest rate offered shall vary from bank to bank. You can also approach NBFCs if your are new to credit or does not have financial history.
Thanks and best of luck for your venture !!
I want to start a catering take away fast food. I am house wife and also differently abled. . Shall I get loan and explain
Hi Preethi,
Its good that you want to start a catering business, it does not matter if you are differently abled. You can easily apply for any loan you want. To start a catering business, you can approach any private or public sector bank for a business loan or MSME loan. Banks like SBI, HDFC, ICICI, Axis Bank, Bank of Baroda, Punjab National Bank, Canara bank, etc. can offers you loan to start catering business. The loan amount can range anywhere between Rs. 50,000 lakh to Rs. 10 lakh under Mudra loan category. The interest rate offered shall vary from bank to bank. You can also approach NBFCs if your are new to credit or does not have financial history.
Thanks and best of luck for your venture !!