There is an increasing pool of women entrepreneurs serving as role models for the younger generation. But this number is small, compared to male entrepreneurs who are dominating the startup ecosystem. One of the biggest reasons why women lose the track is the lack of support and financial investment, making them drop out of the race much earlier.
The MAKERS India report on the State of Women in Tech Entrepreneurship in India highlights the need for more to be done when it comes to investment in women entrepreneurs, especially those in the tech field. As per the findings, women founded and co-founded startups account for less than six percent of total investments infused into the Indian startup ecosystem. Moreover, the funding raised by Indian startups with at least one woman founder accounted for just 5.77 percent or $1.69 billion (across 378 deals) of the total startup investments in India for January 2018 to June 2020.
Under such circumstances, it is important for both the private and public systems to come forward and help women entrepreneurs realise their dreams. There are some government-backed schemes that give wings to aspiring women entrepreneurs, both from urban and rural areas of the country.
Let’s take a look:
Bharatiya Mahila Bank
This initiative was introduced by then-Prime Minister Manmohan Singh in 2013, on the birth anniversary of the country’s first and only female prime minister, Indira Gandhi. Bhartiya Mahila Bank is India’s first women’s bank, under the State Bank of India, that revolves around the banking needs of women.
The bank disburses loans of up to Rs 20 crores for manufacturing units. The Credit Guarantee Fund Trust for Micro and Small enterprises also offers collateral-free loans up to Rs 1 crore, along with a repayment period of seven years. The basic interest rate offered is 10%, upon which 2% additional interest is added making it 12%, making it a lucrative scheme for women entrepreneurs. Women aged 21 to 70 are eligible for this scheme.
Stree Shakti Scheme
This women-centric scheme introduced by the central government is under the flagship of State Bank of India. Tailored for aspiring women business makers, this scheme also covers those women entrepreneurs who have a shared capital of 51% as partners, shareholders or directors of a private company. The scheme offers a loan of up to Rs 50 lakhs, but the rate of interest is dependent on the current rate of interest at the time of availing a loan. A concession of 0.5% is given, if the loan amount exceeds Rs. 2 lakh. The debtor must own 50% of the enterprise she is availing the loan on.
As the name suggests, the central-government sponsored Annapurna Scheme offers loans to women entrepreneurs in the food sector. They could own restaurants, catering businesses, or any other food-related enterprises. Women can utilise the loan amount of up to Rs 50,000 to buy kitchen equipment or new utensils required for their initiative. The repayment duration of the loan is three years, and it can be repaid in 36 installments. A grace period of 1 month is given for the repayment of the loan after it is sanctioned to the debtor. The interest rate depends on the market rates.
Dena Shakti Scheme
This scheme was launched by the central government under the aegis of Dena Bank, and offers loans to those women entrepreneurs who are involved in manufacturing, retail stores, micro-credit and agricultural businesses. The maximum amount of loan levied is Rs 20 lakhs, while for micro-credit, the loan amount is Rs 50,000. A relaxation of 0.25% is given on the prevailing market interest rate. The scheme is open to those entrepreneurs who own more than 50% stake in the organisation.
Mudra Yojana Scheme for Women
This scheme offers financial support to those entrepreneurs who provide services like tuition classes, run tailoring centres or a beauty parlour, among others. Through the Mudra Yojana Scheme for Women, small-scale enterprises and groups of women who aspire to start their cooperative are benefited. The speciality of this loan is that it doesn’t require any collateral support, and is demarcated into three categories of procurement:
Shishu - a loan of Rs 50,000 can be utilised by those, who are in the early stage of their business.
Kishor - The loan amount, in the range of Rs 50,000 - Rs 5 lakh, can be availed by well-established business.
Tarun - Those who want to scale their operations, can avail a loan of Rs 10 lakhs. A mudra card is given to the debtor, and resembles a credit card, the limit of which is set to 10% less than the granted loan.
Cent Kalyani Scheme
This scheme, introduced by the Central Bank of India, aims to help women who work with SMEs and in the agricultural field. This scheme can also be availed by village women, who are self-employed or even work in cottage industries. Under the Cent Kalyani Scheme, women involved in sectors like handloom weaving, food-processing and handicraft, are all covered. A maximum loan of Rs. 100 lakhs can be provided, and no collateral is required. Interest rates are dependent on the current market rate.
(Edited by Athira Nair)