The empowerment of women is important for the economic development of any country. The Government of India, in collaboration with various financial institutions in the country, has introduced several financial schemes to help women entrepreneurs achieve their business goals. Success in any business requires solid working capital. Be it a small-scale industry, cottage industry or large-scale industry.
Despite having the best skills for business and the potential to run a successful enterprise, women are often frustrated by the lack of funding. Hence, the Government of India and several financial institutes have introduced various financial schemes to give the necessary support to women. Whether it is to set up a business from the scratch or expand an existing unit, there are many schemes and loan options available.
The loan is designed to make women financially independent.
For the Indian economy to grow at a steady rate of 9 to 10 per cent over the next few decades, we must work towards creating an ecosystem that supports all kinds of women entrepreneurs.
The problem of the low rate of entrepreneurship among women is due to the lack of business loans for women. But the good news is that many independent financial companies provide loans to women to start businesses in India.
Indian society has a patriarchal system. Therefore, women entrepreneurs in India face many challenges which include the following
In India, a woman's adventurous desire is seen as a disadvantage, raising questions about her competitiveness and ability. From time to time, Indian women have broken this stigma, but society has not yet experienced a comprehensive mental transformation where women are treated equally in social, economic, and political setups, at par with men.
Women entrepreneurs are not only responsible for their business. They are also expected to be responsible for the management of the home and family. This is a big disadvantage compared to their male counterparts.
The safety of women is a major concern in India. Because women entrepreneurs may need to work odd hours and travel to new places, ensuring safety can be a problem.
Another major challenge that women encounter while growing their businesses is the limited sources from where they can get financial support. This usually happens due to gender bias that still exists in some parts of the country, posing a financial challenge for women entrepreneurs.
These loans are mostly available for existing businesses, although some lenders also offer small business loans or SMEs for start-ups. One such loan is the Line of Credit, or LOC, which caters to small to medium-sized businesses, mostly for women entrepreneurs.
A reliable credit score is very important and is used by the lender to establish the final eligibility of the applicant for the loan.
Ideal for a medium-sized business. The loan amount of Rs 50 lakh or more can be borrowed for 3-5 years.
Mostly offered to businesses that are at least one year old and profitable, and to confirm this, the applicant must submit at least one year's financial statements to the lender.
Helps to start a small or home-based business. Loans against securities can be obtained against investments in the stock market, mutual funds, and life insurance policies and up to 60% -75% of their market value. These short-term loans are available for 4-5 years.
Proof of ownership of securities is required to be used as collateral. The documentation is detailed and will require a visit to the lending bank's branch as opposed to an online application.
Personal Loans are offered based on the financial capacity of the applicant, so for a homemaker, who has no previous business experience, it can be difficult to apply for a large loan amount. However, there is an option to add a co-applicant for personal loan as a spouse to simplify the process, which helps increase eligibility. It is a very flexible type of loan that can be used for both personal and business needs.
Monthly income and credit score are important requirements for determining the amount of loan that can be approved.
These days many leading financial institutions offer small business loans to women to encourage women entrepreneurs. Also, women do not need to provide collateral for this loan, so it is easy to avail of the benefits.
Concessions on interest rates
Women who want to get a small business loan can enjoy discounts on interest rates.
Women entrepreneurs with small business loans can repay the loan amount in simple equal monthly instalments (EMIs). Lenders understand that businesses can go through many ups and downs, which is why they offer easy and flexible payment options.
Small business loans can encourage women entrepreneurs to start their businesses or expand their existing businesses. For any business to grow, it is imperative to have adequate funding and a small
Women entrepreneurs must do their research on different financing options and lending institutions that can help them fulfil their business goals. It is important to compare lenders, interest rates, and loan terms to find an offer that best suits their requirements.
Most women entrepreneurs are expected to not only manage their business but also their household and societal duties. This can result in some not being able to grow their enterprise beyond a certain point. Although restricted mobility is a barrier, the Digital India initiative is making it easier for these entrepreneurs to expand their business without having to worry about geographical limitations.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp.
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Covid-19, a once-in-a-century pandemic, has hit the Indian economy hard and has affected almost all sectors.
As a business owner, your reliance on traditional banks is quite understood. After all, very few businesses can survive unpredictable business cycles and manage headwinds without availing of a business loan.
No matter how small, medium or large a business is, they will always require additional cash flow to meet their daily needs. The purpose of getting a loan varies depending on whether you need it to start, run, or expand your business.
The lifeblood of any business, working capital refers to the money available at your disposal to meet present and short-term needs.
As a small business owner, you may need funding from time to time to continue your business operations. And unlike a few decades ago, availing of business funds has become a lot easier now.