Top Business Loans for Women in MSME

Micro, Small, and Medium Enterprises (MSMEs) in India have been growing a lot in recent years. They play a big role in making the country's economy stronger. Whether it's the small shop down the street or the catering service at your party, MSMEs are making a difference everywhere.

MSMEs often face challenges in securing funds through a MSME loan, but Non-Banking Financial Companies (NBFCs) are addressing this issue by providing speedy business loan approvals. This strong partnership between MSMEs and NBFCs has inspired business owners, including women, to pursue and attain their objectives and overcome business problems.

Currently, about 20% of the Indian MSME population, which is approximately 20 million, are women-owned enterprises (WSMEs). These businesses are mainly found in four states: Maharashtra, Uttar Pradesh, Karnataka, and Tamil Nadu. Despite this, around 90% of WSMEs in the country depend on informal financing, and 66% of them don't have a bank account. In essence, this is a significantly underserved segment that holds a great deal of potential.

Thus, if you are a women entrepreneur seeking financial assistance for your ambitious business initiatives, we have you covered. This article lists a mix of business loan and government scheme options to help you overcome business problems and propel your business growth.

Top 6 Business Loans for Women Entrepreneurs:

Business Loan Against Property

MSME owners in India can benefit greatly from a Business Loan against Property, which stands out as one of the top business loan options. If you maintain a good credit score, this loan becomes an excellent choice. You can secure low-interest rates and approval for up to 70% of your property's current market value. If you're planning a business venture, a Business Loan against Property is a suitable option. What's even better? You can enjoy the longest repayment period of up to 15 years!

Furthermore, this type of loan offers income tax exemptions under Section 37(1) and Section 24(b). It's especially advantageous for women seeking funding to expand their businesses or multiple other business growth needs.

Also Read: A Comprehensive Guide to Business Loan Against Property: Everything You Need to Know

MUDRA Loan

On April 8, 2015, the Indian government launched the Pradhan Mantri Mudra Yojana (PMMY) with the aim of empowering women nationwide. This government scheme is regarded as one of the most beneficial business loan initiatives in India. The primary goal is to support women in establishing MSMEs, fostering an inclusive, sustainable, and values-driven business culture. Women can secure loans up to Rs. 10 lakhs from various sources, including banks, NBFCs, and more. Additionally, women residing in rural areas and villages are also eligible to access these loans.

To secure loan approval, it's essential to have a well-thought-out business plan for your MSME venture. Examples of viable business ideas include grocery stores, salons, tuition classes, food joints, and more. With an attractive low-interest rate of 7.30%, you can choose a business loan repayment period ranging from one to seven years.

The Government provides three options within the Mudra Loan Scheme:

• Shishu Loan: Women can obtain a business loan of up to INR 50,000 under this scheme, making it highly beneficial for those starting a business.
• Kishore Loan: This option allows for business loans ranging from INR 50,000 to Rs. 5 lakh, making it an excellent choice for women seeking additional capital for machinery, raw materials, or business expansion.
• Tarun Loan: With this offering, business loans between INR 5 lakh to INR 10 lakh are available, making it particularly beneficial for established MSMEs.

Also Read: Mudra Loan: Government Scheme for Business Loans

ANNAPURNA Scheme

The Annapurna loan scheme, initiated by the Government of India, specifically supports women in the food and catering industry. This scheme allows you to access a business loan of up to INR 50,000, making it one of the top business loans in India. You also enjoy the flexibility of repaying the loan over a period of 7 years. This is an ideal choice if you're looking to kickstart a food, cloud kitchen, or catering business. Moreover, it serves as a valuable resource for obtaining extra capital for your existing food-related venture.

DENA SHAKTI Scheme

The Dena Shakti Scheme presents an excellent financing opportunity for women entrepreneurs aiming to support MSME in sectors like agriculture, micro-credit, retail trade, education, housing, etc. Women who play a significant role in their businesses benefit from an attractive business loan interest rate that is 0.25% below the base rates, making it one of the other top business loans in India.

Under this scheme, you can secure a business loan of up to INR 20 lakh. For those seeking credit in the retail trade and micro-credit category, loans of up to INR 50,000 are available. Additionally, you enjoy an extended repayment tenure of 7 years and a low processing fee of just 0.50% of the loan amount.

UDYOGINI Scheme

The Udyogini loan scheme was launched with the goal of empowering women in underdeveloped and rural areas, providing them the means to initiate their own businesses. This initiative is geared towards promoting women's entrepreneurship, fostering financial independence, and boosting the MSME sector, making it one of the premier business loans in India.

Women with a family income of INR 1.5 lakh per annum are eligible to apply for business loan under this scheme, and they can secure business loans of up to INR 3 lakh. For women engaged in the agricultural sector, interest-free loans are also available. Furthermore, eligible business ideas for this scheme include ventures like baking, grocery stores, fisheries, tailoring shops, and more. Women aged between 25 to 65 years old can apply for business loan under this empowering scheme.

Mahila Udyam Nidhi Scheme

The Mahila Udyam Nidhi Scheme is a government initiative designed for Indian women, offering the opportunity to obtain a business loan of up to INR 5 lakh and allowing for a repayment period of up to 10 years.

Women play a crucial role in their households and contribute significantly to the Indian economy through MSMEs. There are reasonably good business loan options with low interest rates to support women in achieving their dreams! Government schemes are commendable, but if you seek a swift financial solution, business loans through NBFCs stand out as a top choice, making them perfect for women looking to start a new venture or expand existing businesses due to quicker processing.

Take the Next Step

Godrej Capital offers a variety of financing options to meet your diverse needs. Whether you’re looking for unsecured Business Loans, secured loans like Loan Against Property, or specialized products such as Udyog Loan Against Property, we have you covered. For women entrepreneurs, we offer tailored Business Loans for Women that require no collateral, empowering you to take your business to new heights.

Ready to explore your options? Apply now and take the next step toward financial success. For more expert financial advice and insights, visit our Knowledge Centre.

Related FAQs 

1. How to calculate Business Loan EMI?

You can use an online Business Loan EMI calculator to easily estimate your monthly EMIs.

2. What are the features of Business Loan for Women by Godrej Capital?

Business Loan for Women by Godrej Capital is tailored to your unique business requirements and doesn’t need a collateral. With features like flexible repayment, BizRewards, and Flexi Funds (an overdraft-like facility, you can avail of a loan to take your business to new heights)

3. Can a housewife get a loan to start a new business?

Homemakers can secure a personal loan for small businesses through the Pradhan Mantri Mudra Yojana for Women or the Udyogini Scheme

4. What is the highest loan amount in Mudra Loan?

It is INR 20 lakh.

5. Can I apply for Annapurna scheme if my business is not in the food and catering sector?

No. The scheme is exclusive to women business owners in the food and catering sector.

Disclaimer: The contents of this article are for information purposes only & not a financial advisory. For more details, please refer to the product or service document and/ or connect with our customer representative prior to making any financial decision. The information is subject to update, completion, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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