This article covers information on Mahila Udyam Nidhi Scheme & Mahila Uddyami Scheme, loan schemes for women in India. Also, explains its eligibility criteria and businesses covered under the Mahila Udyam Nidhi Scheme.
Women entrepreneurs are shockingly under-represented in India: Only 14% of entrepreneurs in India are women, and out of all women-led businesses, only 21% can secure any type of loan or funding. It’s indeed a matter of great concern that due to various socio-economic reasons, women in India can contribute only 17% to India’s GDP.
Globally, 37% is the average contribution of a nation’s GDP by women. This figure places India below some of the sub-Saharan African nations when it comes to gender equality and women empowerment.
The Govt of India understands and acknowledges this massive problem which Indian women entrepreneurs are facing, and this is the reason that several women-centric business loans and credit facilities have been launched in India.
Prominent among them are the Mahila Udyam Nidhi Scheme and Mahila Uddyami Scheme, both of which are targeted towards empowering women entrepreneurs and making them self-reliant for conducting and running businesses.
In this article, we will share more information on Mahila Udyam Nidhi Scheme, along with explaining the details about this loan scheme for women, its eligibility criteria, and interest rate. We will also provide a brief overview of the Mahila Uddyami Scheme, a SIDBI initiated credit program for women entrepreneurs under the MUDRA Loan program.
Mahila Udyam Nidhi Scheme: Empowering Women Entrepreneurs
Small Industrial Development Bank of India (SIDBI) has launched the Mahila Udyam Nidhi Scheme, which provides credit facilities and financial assistance to women entrepreneurs, who are into production, manufacturing, and service-related industries.
This loan was first started by Punjab National Bank, under the guidance of SIDBI, but to the success of this program, other banks were also included in this scheme.
Here are the Mahila Udyam Nidhi Scheme Details
- SIDBI provides financial assistance in the form of loans of up to Rs 10 lakh to women entrepreneurs and SMEs
- This loan can be used to open a business in the areas of production, manufacturing, and services
- Loan repayment is allowed up to 10 years, and the loan moratorium can be extended till 5 years
- The loan can also be used to upgrade and enhance existing production/manufacturing units, and to upgrade technology for the services industry
- Up to 25% of the project cost can be availed as a loan under Mahila Udyam Nidhi Scheme, with a ₹2.5 lakh ceiling for every project
- SIDBI powers the loan, but banks do the allocation of the loan.
- The interest rate applicable is low and subsidized, but different banks have different interest rates. The final interest rate depends on the credit history of the applicant, location of the business, and type of business.
- As per the rules, a service charge of 1% is charged by the banks, per year for this loan program for women. In some cases, this service fee can be waived off, but it will depend on the lending authority.
Which Businesses are Approved Under Mahila Udyam Nidhi Scheme?
The following list of businesses run and managed by women entrepreneurs can avail a Mahila Loan Scheme (women loan program) under Mahila Udyam Nidhi Scheme SIDBI:
- Repairing of TV (LED, LCD and CRT)
- Mobile repairing centre
- Repairing washing machines, refrigerators, and other electronics appliances
- Daycare for children and Crèche
- Garage and auto-repair centre for two-wheelers and four-wheelers
- Servicing of farm equipment and agricultural equipment
- Beauty Parlour and Spa
- Cable TV Network
- Eateries, Restaurants, Dhabas
- Photocopying centre (Xerox)
- DTP or Desktop Publishing business (Fully computerized)
- Cyber Cafes
- Tailoring shop and/or training institutes
- Educational centres/ training institutes
- Centre for training typists
- STD, ISD Booths
- Purchasing auto-rickshaws
- Purchasing two-wheelers, four-wheelers for business purpose
- Road transport business (handling, managing, driving trucks, pick-up vans)
- Laundry & Dry Cleaning
Eligibility Criteria for Getting Loans Under Mahila Udyam Nidhi Scheme
The best part of the Mahila Udyam Nidhi Scheme is that women entrepreneurs need not provide any collateral for availing of this loan scheme.
The eligibility criteria for getting the loan approval are:
- This loan is only for women entrepreneurs, who are launching a new business or running a new business (Micro, Medium, and Small enterprises)
- The ownership and financial holding of the women entrepreneurs should not be less than 51% of the overall value of the company
- The business should be engaged in Manufacturing, Services or Production.
- The minimum investment made by the business (Micro, Small or Medium) should be Rs 5 lakhs.
- The loan can be only used for these business activities: Upgradation of service, Upgradation of machines/equipment, business expansion, business improvement, diversification, or launching a new business with the above eligibility criteria in the eligible business models.
Learn more about – What are Micro, Small and Medium Enterprises?
What is Mahila Uddyami Scheme?
Mahila Uddyami Scheme is another major financial assistance program for women entrepreneurs, under the aegis of SIDBI.
This is a special loan program for women industrialists and entrepreneurs under the MUDRA Program.
The major highlights of the Mahila Uddyami Scheme are:
- Registered Micro MSMEs under MSME Act are eligible for this loan program
- This loan is only applicable for Micro-enterprises, which are into services and manufacturing or production of goods
- No collateral is needed for the loans under this Govt. scheme
- Only non-agricultural based businesses and micro-enterprises are eligible for this loan program for women
- The loan also covers micro-finance institutions, which are into providing loans for women, or groups of women
- Joint Liability Group or JLG are also eligible to get loans under this scheme (up to 4 members constitute a JLG)
- Self-help Groups or SHGs can also avail loans under this scheme (up to 20 members constitute an SHG)
- The interest rate applicable depends on banks, as per RBI rules
If you are seeking more information on business loans for women entrepreneurs, and wish to know details on such Govt programs, then we at MSMEx can provide you with instant assistance.
MSMEx is an MSME education platform, wherein business experts and coaches provide live consultation to entrepreneurs, SMEs, and businesses, all across India. Talk to an MSMEx expert and take your entrepreneurial journey to the next level.
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