Access to Finance: Loans Schemes Supporting Women Entrepreneurs in India

Access to Finance_ Loans Schemes Supporting Women Entrepreneurs in India


Being a crucial player in India’s economic development, women entrepreneurs face numerous challenges, including limited access to finance. However, the government has implemented various schemes to address this issue and promote women-led businesses. In this blog, we will explore the top government schemes that financially support women entrepreneurs in India, their features, eligibility criteria, and benefits.

I. Importance of Women Entrepreneurs in India’s Development:

Women entrepreneurs are becoming increasingly important in India’s economy, and their contributions should not be underestimated. These female entrepreneurs are playing a vital role in India’s economy, generating employment, promoting development, and fostering prosperity. Recent statistics show that women make up 14% of all entrepreneurs in India, accounting for 8 million individuals. Moreover, 10% of all formal businesses in the country are owned by women.

II. Challenges Faced by Women Entrepreneurs:

Women entrepreneurs face several challenges that make it difficult to grow and expand their businesses. One major challenge is their limited access to finances. This means that they often struggle to secure the capital needed to start or expand their businesses. Additionally, there is a credit disparity between men and women, where women may have more difficulty obtaining loans or accessing financial resources. This lack of financial support greatly affects their entrepreneurial journey and prevents them from reaching their full potential.

III. Access to Finance:

A. Limited Finance and Credit Disparity:

There is a significant gender gap in access to credit in India, resulting in a $158 billion financing gap for women-led businesses. A report suggests that almost 90% of women entrepreneurs have never had access to formal credit. Women typically borrow small loans, and only 12% of women have access to credit. Biases, social conditioning, and lack of gender sensitivity in formal financing are some of the main reasons for this gap. Women also face inadequate business support and a lack of awareness. In addition, there is a lack of credit products that suit women’s needs, with higher interest rates and stringent requirements. This credit gap needs to be addressed to support women-led businesses.

B. Importance of Small Business Loans for Women:

 SME loans are a great option for female entrepreneurs. They provide access to capital, which can be difficult for women to secure from traditional sources. These loans help businesses grow by funding hiring, inventory purchases, and marketing efforts. SME loans also promote financial independence, allowing entrepreneurs to avoid relying on others for funds. Additionally, taking out and repaying these loans can help build a positive credit history for future financing opportunities. Overall, SME loans are a valuable tool for female entrepreneurs to overcome financial barriers and achieve success.

C. Interest Rates and Loan Amounts Available:

To support women entrepreneurs, small business loans offer lower interest rates. The amount of the loan depends on the needs of the business and the specific loan program. The goal is to encourage more women to start their businesses and provide them with the financial support they need. These lower interest rates help make it easier for women to access the funds necessary to grow their businesses and achieve their entrepreneurial goals.

IV. Top Banks and Schemes Supporting Women Entrepreneurs:

   A. Central Bank of India – Cent Kalyani Scheme:

      – The scheme offers financial assistance to women across various sectors.

      – It provides collateral-free loans up to ₹1 crore with competitive interest rates.

   B. Punjab National Bank – Mahila Udyam Nidhi Scheme:

      – This scheme facilitates the provision of financial assistance for different project categories.

      – Loans up to ₹10 lakh are granted without requiring collateral.

   C. Mudra – Pradhan Mantri Mudra Yojana:

      – Pradhan Mantri Mudra Yojana focuses on providing small business loans to all individuals, including women entrepreneurs.

      – The scheme offers loans up to ₹10 lakh, categorized into three types: Shishu, Kishore, and Tarun.

   D. Bank of Baroda – Shakti Scheme:

      – The Shakti Scheme supports women entrepreneurs engaged in various industries.

      – Loans up to ₹20 lakhs are offered, and concessions on interest rates are provided.

V. Other Government Schemes Supporting Women Entrepreneurs:

   A. Mudra Yojana, Stand-Up India Scheme, Mahila Coir Yojana, etc.

   B. These schemes provide additional financial assistance, training, and skill development support.

VI. Eligibility Criteria and Documents Required:

A. Ownership Requirements for Women Entrepreneurs:

To be considered a women entrepreneur, it is important to have at least 51% ownership in the business. This means that women should have the majority control and decision-making power. Additionally, the business must abide by all legal requirements and be officially registered. This ensures that the business is recognized and operates within the laws and regulations set by the government. By meeting these criteria, women entrepreneurs can establish and run their businesses with legitimacy and efficiency.

B. Documentation Needed for Loan Applications:

– Business Loan application form together with a passport-size photo of the women business owner

– Pan Card of the Business

– Identity Proof of the Promoters or Business Owner (PAN card, Aadhar Card, Passport, Voters ID card, Driving License)

– Address Proof of the Business (Utility Bill, Trade License, Lease Agreement, Sales Tax Certificate)

– Bank Account Statement

– Address Proof of the Promoters or Business Owner (Passport, Aadhar Card)

– Income Proof (Bank statement or passbook of the last 6 months to 2 years)

– Financial Proof (Income Tax Return of the last 2 years, computation of Balance Sheet, Income and Profit & Loss A/c, previous 3 years’ audited financials, previous 6 months’ bank statements, last 2 years’ audited Balance Sheet, GST Challans, Tax Audit reports)

– Proof of business continuation (ITR, Trade License, Shop & Establishments Certificate, Sales Tax Certificate)

– Business Ownership Proof (Sole Proprietorship declaration or Certified True Copy of Partnership Deed, MOA, and AOA certified by the Directors, Board Resolution in original signed by all the Business Owners)

(Note: This is a generic list of documents required to get a Business Loan for female business owners, but every lender may have a different list. Make sure you check the document list beforehand and keep all the documents ready.)

VII. Application Process:

You can visit the bank’s website and fill out an online application form to apply for a loan. You will need to provide the required information and upload any necessary documents. Once you have completed the online application, you will need to submit hard copies of the application form and supporting documents to the bank branch. The time it takes for the loan to be approved and disbursed may vary depending on the specific loan scheme and the bank’s internal processes.

VIII. Benefits of Small Business Loans for Women:

Small business loans can be very beneficial for women entrepreneurs. One of the benefits is that they can be easily accessed without the need for providing collateral. This means that women don’t have to risk their assets to get a loan for their business. Another advantage is that there are often special interest rates for women, making it more affordable for them to borrow money. Additionally, these loans usually come with flexible and easy repayment options, allowing women to manage their cash flow more effectively. Lastly, these loans also encourage business growth by providing financial support for expansion and increased profitability.


In conclusion, access to finance is a crucial factor in the success and growth of women entrepreneurs in India. However, various government schemes have been implemented to address this challenge and provide financial support to women-led businesses. These schemes, offered by banks and government entities, offer collateral-free loans, lower interest rates, and flexible repayment options. They also provide additional assistance such as training and skill development programs. By availing of these schemes, women entrepreneurs can overcome financial barriers and unlock their full potential, contributing significantly to India’s economic development. Women entrepreneurs need to be aware of these schemes and take advantage of the opportunities they provide to achieve their entrepreneurial goals.