In recent years, India has witnessed a significant rise in women entrepreneurs across diverse sectors. From tech startups to home-based businesses, women are breaking barriers and building enterprises that empower both themselves and their communities. However, access to finance remains one of the biggest hurdles in their entrepreneurial journey.
To bridge this gap, the Indian government has introduced various loan schemes and financial assistance programs tailored specifically for women entrepreneurs. These schemes not only offer financial support but also boost confidence and promote inclusivity in the business ecosystem.
This article provides a comprehensive guide to the top government loan schemes for women to start a business in India, detailing their features, eligibility criteria, interest rates, application processes, and benefits.
Why Government Loan Schemes Matter for Women Entrepreneurs
Women-led businesses often face multiple challenges:
- Limited access to capital
- Lack of collateral or credit history
- Gender bias in lending practices
- Limited financial literacy
Government loan schemes address these challenges by:
- Offering collateral-free loans
- Providing subsidies and interest concessions
- Encouraging first-time women entrepreneurs
- Supporting women in rural and semi-urban areas
Major Government Loan Schemes for Women Entrepreneurs
1. Stand-Up India Scheme
Overview:
Launched by the Government of India in 2016, the Stand-Up India scheme promotes entrepreneurship among women and SC/ST individuals by facilitating bank loans.
Key Features:
- Loan amount: Rs. 10 lakh to Rs. 1 crore
- Purpose: Greenfield enterprises in manufacturing, services, or trading
- Minimum 51% stake should be held by a woman entrepreneur (if joint venture)
- Composite loan (term loan + working capital)
Eligibility:
- SC/ST or woman entrepreneur
- Age 18 years or above
- Greenfield (first-time venture) business only
Interest Rate:
- Depends on bank policies, usually MCLR + 3%
Repayment:
- Tenure up to 7 years with a maximum moratorium of 18 months
How to Apply:
- Visit the Stand-Up India portal: standupmitra.in
- Fill out the online application and connect with a bank
- Assistance through SIDBI or Lead District Managers
2. Mudra Yojana (PMMY – Pradhan Mantri Mudra Yojana)
Overview:
A flagship scheme under PMMY, Mudra Yojana offers micro-credit to small and micro businesses, including those led by women.
Types of Loans:
- Shishu: Up to Rs. 50,000
- Kishor: Rs. 50,001 to Rs. 5 lakh
- Tarun: Rs. 5 lakh to Rs. 10 lakh
Key Features:
- Collateral-free loans
- Available through commercial banks, NBFCs, MFIs, and RRBs
- No processing fee for Shishu loans
Eligibility:
- Non-corporate small business segments like traders, artisans, manufacturers, and women-run enterprises
Interest Rate:
- Varies by lending institution and loan size
How to Apply:
- Approach any participating bank or NBFC
- Submit identity, address, and business proof documents
3. Mahila Udyam Nidhi Scheme (by SIDBI)
Overview:
This scheme, run by the Small Industries Development Bank of India (SIDBI), supports women in establishing or upgrading small-scale businesses.
Key Features:
- Loan amount: Up to Rs. 10 lakh
- Flexible repayment tenure up to 10 years
- Special focus on beauty parlors, boutiques, day care centers, etc.
Eligibility:
- Women setting up new businesses or expanding existing ones
Interest Rate:
- Determined by SIDBI based on project cost and risk
How to Apply:
- Visit the nearest SIDBI branch or apply via SIDBI-authorized banks
4. Dena Shakti Scheme (Merged with Bank of Baroda)
Overview:
This scheme specifically supports women engaged in agriculture, retail, manufacturing, microcredit, and services.
Key Features:
- Concession of 0.25% in interest rates
- Loan amount up to Rs. 20 lakh for retail and manufacturing
- Micro-credit up to Rs. 50,000
Eligibility:
- Women entrepreneurs with a viable business plan
How to Apply:
- Visit the nearest Bank of Baroda branch
- Submit KYC, business plan, and other required documents
5. Annapurna Scheme
Overview:
For women looking to start food catering or tiffin services, the Annapurna scheme provides necessary funding to buy utensils, equipment, etc.
Key Features:
- Loan up to Rs. 50,000
- Repayment tenure: Up to 3 years
- EMI-based repayment
Eligibility:
- Women aged 18-60 planning to start a catering business
- Guarantor required (usually spouse or family member)
How to Apply:
- Apply at SBI, Bank of Baroda, or other participating banks
6. Bharatiya Mahila Bank Business Loan (Now part of SBI)
Overview:
Initially launched as a women-centric bank, it now functions under SBI and continues to offer special loans for women entrepreneurs.
Key Features:
- Loans up to Rs. 20 crore (for manufacturing)
- Lower interest rates for women
- Covers working capital and term loans
How to Apply:
- Visit any SBI branch and inquire about women entrepreneur-specific schemes
7. Udyogini Scheme (By Women Development Corporation)
Overview:
Offered by various state governments in association with banks, Udyogini encourages women from rural and underprivileged backgrounds to become self-reliant.
Key Features:
- Loan amount up to Rs. 3 lakh
- Interest subsidy based on income and category (SC/ST/BPL)
- Training and support included
Eligibility:
- Women aged 18–55
- Annual income below Rs. 1.5 lakh (varies by state)
How to Apply:
- Visit your district Women Development Corporation office or local banks
Documents Required for Loan Application
- Aadhaar card, PAN card, Voter ID (Identity Proof)
- Residential Proof
- Income Certificate
- Business plan or project report
- Bank statements
- Caste certificate (for SC/ST schemes)
- Proof of ownership or rent agreement (for business premises)
Tips for Women Applying for Startup Loans
- Prepare a detailed business plan
- Choose a scheme that aligns with your business type and scale
- Maintain a good credit history
- Take advantage of training and mentorship programs offered by banks or SIDBI
- Keep all documents ready and verified
Benefits of Government Loan Schemes for Women
- Easy access to capital without heavy collateral
- Financial independence and empowerment
- Reduced interest rates and subsidies
- Encouragement for rural and first-time women entrepreneurs
- Support for a wide range of businesses: retail, food, manufacturing, and services
Frequently Asked Questions (FAQs)
Q1. Are there any government schemes for housewives to start a business?
Yes, schemes like Mudra Yojana, Udyogini, and Mahila Udyam Nidhi cater to women including housewives.
Q2. Can I get a business loan if I have no collateral?
Yes, most government schemes offer collateral-free loans under CGTMSE or other provisions.
Q3. What is the minimum loan amount I can apply for?
It varies from scheme to scheme, starting as low as Rs. 10,000 under micro-credit options.
Q4. Can I apply for more than one scheme?
You can apply for multiple schemes, but not for the same business purpose simultaneously unless allowed.
Q5. Do I need to have prior business experience?
Not always. Many schemes support first-time women entrepreneurs, especially under Stand-Up India or Mudra Shishu.
Conclusion
Empowering women through entrepreneurship is not just about gender equality—it’s about economic growth and inclusive development. The Indian government has taken strong steps by launching several business loan schemes tailored to the unique needs of women entrepreneurs.
Whether you’re planning to open a boutique, start a tech company, or launch a home-catering service, these loan schemes offer the financial and moral support you need. By choosing the right scheme and preparing smartly, you can turn your business dream into reality.
If you’re a woman with a vision—now is the time to act. Explore these schemes, gather your documents, and take that first step toward financial independence and entrepreneurial success.