With the rising awareness of women’s contribution to India’s economic growth, there is an urgency to understand their state of operation in the financial domain. Despite this recognition, financial limitations remain a significant challenge for women entrepreneurs.
An analysis of demand and supply of capital for women-owned Micro, Small and Medium Enterprises is crucial to enhancing their access to finance through better strategies. Women entrepreneurs’ loan options are such initiatives introduced to bridge this financial gap and encourage more women to set up and propagate the growth of their own ventures.
Various types of business loan in India are now being offered to women entrepreneurs by financial institutions, as well as the government, to increase their company’s cash flow and conduct daily operations smoothly.
Top women entrepreneur loan in India 2021
- Small business finance
Many financial institutions are now offering different types of business loans for small business or SMEs. These small to mid-scale loans are a great source of financing for women entrepreneurs, who can now borrow up to Rs.45 lakh and inject capital into their business.
Women business owners can opt for a Flexi loan facility, using which they can utilise only the amount they require from a pre-sanctioned quantum. One needs to pay interest for only the amount used and not on the absolute credit limit.
- Unsecured business loans
These loans are best for women entrepreneurs with existing businesses looking for instant financing options. Ideal for medium-scale businesses wanting to expand, business women can avail up to Rs.45 lakh for a tenor of up to 84 months.
These unsecured funding solutions can be availed by businesses with a vintage of 3 years or more. These loans are quickly approved with minimal documentation and come with a hassle-free online application process. Women business-owners can further boost their finances through this loan option against easy to meet terms.
These loans also bring their fair share of advantages that make availing them easier.
For instance, financial institutions like Bajaj Finserv provide women entrepreneurs pre-approved offers to streamline the loan application process. These offers are available on multiple financial products, such as personal loans, business loans and more. You can check your pre-approved offer by submitting your name and phone number.
- Government loans
The Government of India is also taking up efforts to promote women entrepreneurship through multiple women entrepreneurs loans. These loans are available at lower interest rates and require no collateral.
The Mudra Yojana Scheme for Women is to encourage women to set up their small enterprise. This government scheme allows women business-owners to avail a loan of Rs.50, 000 for a small-business start-up under the Shishu option and Rs.5 lakh and Rs.10 lakh for existing businesses under the Kishor and Tarun options, respectively.
- Loan against securities
For women who plan to start a small business or a home-based business, a loan against securities is the ideal scheme to opt for. Women can easily assure their investments in mutual funds, stock markets or life insurance policies and borrow a loan against it.
The loan amount acquired through this funding option can be used as per one’s requirement. As a loan against securities is availed against collateral, the interest rate can be more competitive than other business loan options. As a short-term loan, the tenor is generally for up to 4-5 years. However, substantial ownership proof of the invested securities is required before a loan of up to 75% is approved against it.
Financial support is one of the major obstacles that women entrepreneurs face while setting up or expanding a business. The availability of different types of business loans or specially schemed women entrepreneur loans can help overcome this challenge. Nonetheless, before availing any loan, interest rates, loan tenor, lender’s market reputation, and repayment options must be considered.