Lending A Hand To Realise Dreams

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Lending A Hand To  Realise Dreams
Himali Patel - 11 March 2020

There is a popular saying “No dream is too big, no dreamer too small”. This holds true especially for women entrepreneurs who are starting their own businesses to make their dreams come true. Regardless of their dreams to start in today’s modern world of business, the challenges encounter on every steps are not any less, considering many of them struggle to survive in this tough business environment. As per the Global Entrepreneurship Monitor, in India, out of 100 business owners, only seven are women. The data indicates that there has been a 21.9 per cent decline in Women Entrepreneurial Activity Rate to 62.1 per cent in 2018 from peak of 79.6 per cent in 2017. The reason being an increase participation from men’s entrepreneurial activity rate from 10.3 per cent to 14 per cent, thereby highlighting a widening gender gap. However, women entrepreneur should not give up their dreams so easily due to the lack of financial capital, or minimal support or from tough competition!

Nothing is more discouraging than to realise that your dreams would never take off without any backup in terms of good financial support. Today there is limited access to capital and funding for women entrepreneurs still continues to be the biggest challenge for women-led ventures. “If one analyses the capital structure of small or mid-sized women-led ventures, most of these ventures are boot-strapped. This problem emanates from the fact that there is a certain mind-set or stereotype towards women-led ventures, which in-turn limits flow of capital to such businesses. There is an urgent need to push for broader diversity and inclusivity to fund women entrepreneurs,” explains Priti Rathi Gupta, Founder of LXME and MD and Promoter at Anand Rathi Share and Stock Brokers. Having said that, Indian government including central as well as state levels have launched various schemes that supports and promotes women entrepreneurs. Apart from that there are various other platforms targeted towards women entrepreneurs that provides financial aid.

The Women Entrepreneurship Platform (WEP) under Start-up India Initiative is one such comprehensive platform which provides support for arranging capital as well as other tangible and intangible benefits for new age and innovative businesses, specifically for women entrepreneurs. It was launched by Niti Aayog, Government of India in partnership with Small Industries Development Bank of India (SIDBI). “Under the dedicated Women Entrepreneurship Platform (WEP), it supports early-stage businesses, as well as existing women-led ventures. The benefits of the platform are not limited financial aid, grants or funding.There are additional benefits like free credit rating, mentorship,apprenticeship and corporate partnerships etc. But most importantly, this platform also encourages mutual learning and outreach among women entrepreneurs,” says Gupta. That said, New-age and innovative tech-led businesses with turnover of up to `100 crore during a financial year since inception, can avail benefits under the Start Up India Initiative.


For the women entrepreneurs, there are also other schemes like Mahila Udyam Nidhi and Mahila Vikas Nidhi, which is implemented by SIBDI through banking and financial institution channels. These schemes are expected to provide equity to women entrepreneurs and developmental assistance for new and existing businesses. Under Mahila Udyam Nidhi Scheme the loans upto `10 lakhs are sanctioned “Under this scheme the SIDBI offers loans to Autorichaw drivers, day care centers and beauty palours amongst others. These schemes enable women to set up small scale ventures. The loan provided can be upto Rs10 lakh payable in 10 years with five years as moratorium,” says Dilshad Billimoria, Director and Certified Financial Planner, Dilzer. Further under this scheme no collateral is taken for any kind of loan by the bank as security. When it comes to small and medium enterprises, Women also have the broader Pradhan Mantri MUDRA Yojana, where women entrepreneurs could benefit by availing loans at reduced interest rates from banks and Micro-Finance Institutions.

Women Entrepreneurs can avail term loans or working capital loans upto Rs10,00,000 under this scheme. This would essentially cover most conventional, service and agriculture-based businesses. “Women entrepreneurs are provided an additional benefit of reduction in interest rates by 25 basis points (bps) (1 bps is 0.01 per cent). The success and penetration of this particular scheme among women entrepreneurs could be gauged from the fact, MUDRA’s annual report of 2018-19 states that, 41 per cent of the sanctioned loan amount under this scheme went to women beneficiaries,” highlights Gupta. Having said that, the loans disbursed under this scheme mainly consist of working capital loans, and term loans for businesses involved in transportation, agriculture, textile and food, community, social, personal services, equipment and machinery financing among others.

If you are dreaming of setting up your own business of food and catering, Annapurna scheme might just be for you. This scheme offers loans upto Rs50,000, which aids you to buy utensils, refrigerator, gas connection, water filter and so on. However, when it comes to a security, a guarantor is required thereby pledging the assets of the business as a collateral. The loan amounts need to be repaid in 36 monthly instalments post the loan is sanctioned. The loan interest rate is determined on the basis of market rate as well as bank interest rates. Currently the scheme is offered by State Bank of Mysore and Bharatiya Mahila Bank.

For women, who want to make a business start in manufacturing goods or in agricultural work, then the Dena Shakti scheme offers financial support to a women entrepreneur. The scheme which is offered by Dena bank, also on other sectors such as micro and small enterprises and education. as well as lending towards housing sector. The loan tenure is up to seven years and provides a flexibility towards repayment, which can last as ,long as up to 10 years.

“The scheme provides loans up to Rs20,00,000 for women entrepreneurs in agriculture, manufacturing, micro-credit, retail stores, or small enterprises. It also offers a concession of 0.25 per cent on rate of interest. Loans up to Rs50,000 are offered under the microcredit category,” says Billimoria, appreciating the move.

Apart from this, few public and private sector banks have started providing loans under their own initiatives to aspiring women entrepreneurs.

On the other hand, Government of India, in order to boost economic empowerment of women, started a Trade Related Entrepreneurship Development Assistance Scheme. This scheme offers a women credit mostly through non-governmental organisations (NGO) for training, development as well as counselling extension activities that are related to trades, products and services.  Having said that, the entrepreneur’s project cost upto 30 per cent will be granted by the government and remaining 70 per cent would be appraised by the lending institution in the form of loan assistance for those women entrepreneurs who lack funding of credit from banks.


Furthermore, the amount given to any women would be routed through the NGO, that would be responsible for aiding the entrepreneur in the development of their unique products.

In order to avail loans faster, the government has also started providing loans up to Rs1 crore within just 59 minutes.

Sometime back MasterCard conducted a survey regarding funding possibilities among women.


“Although interest rates have been on a downward trend over the late 2018 and 2019, and the Indian government has recently launched a 59-minute loan platform to make access to credit for micro,small and medium enterprises easier women’s inclination to borrow for business purposes remained unchanged, averaging at 5.7 per cent over 2016 to 2018,” points out a report by Mastercard in Mastercard index of women entrepreneurs 2019. “However, there has been a slight increase in women’s tendency to save to start a business, rising from 4.5 per cent in 2016 to 7.3 per cent in 2018,” states the report.

Further the markets that were ranked low in the mastercard index of women entrepreneurs 2019 especially in less wealthy, less innovative and driven economies such as India, witnesseed comparatively less supportive entrepreneurial conditions to empower women.

From less regarded in equal in business to less opportunities, women have to go through many cultural biases which often leads to giving up their on their dreams of becoming entrepreneur.

“Women here need to overcome infrastructural shortcomings such as less developed financial and commercial systems, lack of effective and efficient government support programs, and less opportunities for higher level education.Under these circumstances, women are unable to grow,” notes the report.

Having said that, any funding for women entrepreneurs whether from government or venture capitaslists not only opens up huge untapped opportunity for financial institutions but also ensure growth of capital providers.



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