Government Schemes for Women Entrepreneurs in India

In India, where there are over 15.7 million women-owned enterprises and women are driving the start-up ecosystem, female entrepreneurship is gaining ground. It is anticipated that during the next five years, this number will rise by 90%. Despite their growing zeal, women entrepreneurs still face a variety of challenges, such as bias against them because of their gender, a lack of funding, and inadequate support. The Indian government has introduced a number of programmes to assist female entrepreneurs in response to these difficulties.

We'll go through some of the most important government initiatives for women business owners in India in this blog.

List of Government Schemes to Empower Women in India

Mudra Yojana

The Mudra loan scheme is a government initiative in India aimed at promoting entrepreneurship and providing financial support to micro and small enterprises. The scheme has a special focus on women entrepreneurs, as it aims to empower and promote women's entrepreneurship in the country. Mudra loans for women are also available on easy terms and conditions, with no collateral required for loans up to ₹10 lakhs. The scheme also offers lower interest rates to women entrepreneurs, making it a lucrative option for those looking to start or expand their businesses.

Stand-Up India Scheme

The Stand-Up India Scheme is a government scheme that aims to promote entrepreneurship among women and other marginalized communities. It provides bank loans to at least one scheduled caste (SC) or scheduled tribe borrower and at least one woman per bank branch for the establishment of a greenfield business. In the case of non-individual firms, a SC/ST or woman entrepreneur must possess at least 51% of the ownership and majority stake. Under this scheme, women entrepreneurs can get a loan ranging from ₹10 lakh to ₹1 crore to start or expand their small business.

Mahila Coir Yojana

Mahila Coir Yojana (MCY) intends to empower women by providing spinning equipment at reduced prices following proper skill development training. Under this scheme, women entrepreneurs can get a subsidy of up to 75% of the cost of equipment and machinery for coir processing. The scheme also provides a margin money subsidy of up to 25% of the project cost. The scheme is available to rural women artisan who are above 18 years of age and has completed a training programme in coir yarn spinning at any of the Coir Board's training institutes.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The Small Industries Development Bank of India (SIDBI) and the Ministry of MSME introduced the initiative to provide collateral-free financing to the micro and small enterprises. Both existing and new enterprises are eligible to be covered under the scheme, for which a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been established to provide credit facilities up to ₹ 200 lakh per eligible borrower covered, provided they are extended on the project viability without collateral security or third-party guarantee. The extent of guarantee cover is 85% for Micro and Small Enterprises being operated and/or owned by women; while other borrowers get up to 75%.

Prime Minister’s Employment Generation Programme (PMEGP)

Udyam Shakti Portal

It was launched by the Ministry of MSME for promoting social entrepreneurship by creating low-cost products and services. It offers assistance with business planning, incubation facilities, training programs, mentorship, market research, and more. Projects with a maximum cost of ₹25 lakhs are eligible for the scheme, with ₹10 lakhs allocated specifically for service-based projects. The initiative's online portal has played a significant role in empowering women beyond the confines of their homes.

Economic Empowerment of Women Enterprises and Start-up by Women

It is a Ministry of Skill Development and Entrepreneurs scheme that provides an incubation and acceleration programme for female micro entrepreneurs to launch new businesses and scale up existing ones. The initiative is now operational in the states of Assam, Rajasthan and Telangana.

Trade-Related Entrepreneurship Assistance and Development (TREAD)

This initiative aims to economically empower women by providing finance (through NGOs), training, development, and counselling expansion activities linked to trades, goods, and services, among other things. Non-Governmental Organizations (NGOs) get assistance in the form of a grant from the Government of India (GoI) of up to 30% of the total project cost, as determined by the lending agency, to promote entrepreneurship among target groups of women. The remaining 70% of the project cost is financed by the lending agency as a loan for carrying out the activities outlined in the project.

Challenges Faced by Women Entrepreneurs

The World Economic Forum finds India slightly improving in gender parity ratio though it is still ranking low as per Global Gender Gap Report, with economic status widening the gap in women's equality in every sphere. Let us look closely at those specific areas where women need a nudge.

• Limited Finance

According to an IFC report published in 2022, about 90% of female entrepreneurs in India had not borrowed from a formal financial institution. In addition, whereas 53% of male business owners lacked financial reserves during the 2020 lockdown, the number for female-led enterprises was as high as 72%.

In India, women obtain credit equal to just 27% of the deposits they provide, compared to males who receive credit equal to 52% of their deposits. This disparity might be attributed to financial organisations not granting credit evenly to women.

• Access to Professional Networks

Another fundamental issue for women entrepreneurs in India is a lack of access to professional networks. According to the Google-Bain survey, 49% of respondents experience a lack of professional support as a result of restricted inclusion in formal and informal networks.

• Family Duties

Women in India are expected to be the caretakers at home regardless of their duties in the office or business. Juggling roles, they are expected to be efficient in both. It is time that women start addressing these gaps and stop playing the super women that eventually compromise their output.

• Lack of Training

A major chunk of female entrepreneurs (44%) say that lack of structured knowledge and skills is a significant impediment to expanding.

Also Read - What is Women's Savings Account?

Bottom line

Women entrepreneurs have a role to play in changing the nation. However, without financial resilience, their place in society will be downplayed. Considering the challenges that women entrepreneurs are facing, the Indian government has introduced several initiatives to promote and support female entrepreneurship, including several loan schemes. These schemes can consolidate women-lead companies financially and back their future growth. For details on loans and investments, get in touch with the Bank of Baroda. Take advantage of their banking facility to lay a firm financial foundation.

Government Schemes for Women Entrepreneurs FAQs

What are the schemes for women's empowerment in India?

The government of India is taking active measures in ensuring that women in India participate more in nation-building. Including and encouraging women more into the workforce, various government schemes for women promote entrepreneurship and investment.

Government Loan Schemes for Women

• Mudra Yojana Scheme
• Stand-Up India Scheme
• Mahila Coir Yojana
• CGTMSE
• PMEGP
• Udyam Shakti
• TREAD
• Economic empowerment of women enterprises and start-up by women
• Bharatiya Mahila Bank Business Loan

Government Investments Schemes for women

E-Kisan Vikas Patra Scheme, Government Saving Bonds, Gold Monetization Scheme, PPF (Public Provident Fund), agree to an EPF (Employees’ Provident Fund), ULIP (Unit-Linked Insurance Plan) that also provides tax benefits, NSC (National Saving Certificate), SSY (Sukanya Samriddhi Scheme) and the latest small saving scheme Mahila Samman Savings Certificate.

How can a woman apply for a small business loan?

Women stepping into entrepreneurship are encouraged by the government and banks. Various government loan schemes for ladies for small businesses like the Mudra loan are floated by the government for women's benefit. Educate yourself with an internet search or get in touch with your bank branch to learn about the details.