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Empowering the Women's Entrepreneurial Ecosystem A lot is to be done yet as women entrepreneurs in India are neither considered comparable nor encouraged to be in the majority

By H.P. Singh

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Many widespread social values support the patriarchal system that does not create an environment conducive for women to work unless there is a necessity. Women have always been trying to shed this traditional mould. Recently, more women have emerged into the league of earnest, ambitious, and determined business owners. However, a lot is to be done yet as women entrepreneurs in India are neither considered comparable nor encouraged to be in the majority.

Current challenges as a woman entrepreneur

A major challenge women-led enterprises in our country face is the lack of capital due to investor prejudices and other factors. This is due to poverty, cultural barriers to property, and land ownership causing a lack of collateral for loans and limited employment in the formal sector. Running a business requires long hours and dedication, and this puts women in conflict with their family commitments, making them feel guilty about prioritizing their business. One needs a lot of encouragement in the form of mentors and an ecosystem/support system to handle a business. A majority of businesses are dominated by men, thus, making it difficult for women to get introductions and connections into the elite business networks. Women have always been confined to a supportive role, hence, leading in the professional world gets conflicting causing rifts in the social life of budding women entrepreneurs. As a result, leading in the professional world becomes conflicting, causing schisms in the social lives of aspiring female entrepreneurs.

Entrepreneurial loan options for women

To assist women in their entrepreneurial initiatives, from financial bodies to government schemes, there are recently many different types of business loans to aid them:

Small business loans: Small business loans are offered for startups and existing businesses. One such loan for female entrepreneurs is the line of credit. The eligibility of the applicant is checked, and women are then permitted to borrow money up to a maximum credit limit with certain documents. While repaying, they have to only pay interest on the amount used and not on the entire credit limit.

Commercial business loan: This loan, ideal for a medium-sized business, can allow females a certain amount, for a tenure of up to three-five years. It does not require detailed paperwork. To gain eligibility, the business needs to be at least a year old and established. The applicant has to submit the current account statement for a one-year minimum to the lender.

Loan against securities: Women can acquire this loan against investments in the stock market, mutual funds, and life insurance policies. These are available for four-five years and require ownership proof of the securities, to be used as collateral.

Personal loan: Women planning to start a home-based business can seek out this loan. It is offered based on the applicant's financial stability. An option to add a co-applicant to help increase eligibility makes it beneficial. It can be used both personally and professionally. Monthly income and credit score are requisites to determine the loan amount to be sanctioned.

Loan schemes that women can consider

The Indian government introduced loan schemes to aid women to get financial support for their entrepreneurial journey.

Mudra loan scheme for women: This scheme was launched to provide financial support for enthusiastic women entrepreneurs starting a new business in the form of a beauty salon, tailoring shop, coaching classes, etc. It does not require any security and has categories under which it can be applied. They are Shishu Loans for growing businesses, Kishor Loans for recognized businesses who wish to improve services, and Tarun Loans for well-established businesses planning to expand.

Annapurna scheme: Women entrepreneurs who need loans for food catering businesses come under this scheme. They make use of the borrowed amount for working capital like buying utensils, tiffin boxes, working tables, etc. Once it is approved, there is no EMI for the first month. Only if sanctioned, the amount has to be repaid in 36 monthly nstalments. Interest rates are charged as per the market rate and the concerned bank.

Dena Shakti scheme: Women entrepreneurs in the fields of agriculture, micro-credit, manufacturing, retail stores, or small enterprises can receive a loan from the Dena Shakti Scheme. A 0.25 per cent concession is given on the interest rate.

The Cent Kalyani Yojana: Self-employed women in micro-companies such as cottage industries, farming, agriculture, and retail trade are eligible to apply for this scheme. No security is required, and the interest rate depends on market rates. The loan has to be repaid within a tenure of seven years.

Today, our country boasts of successful businesswomen across the world. However, the journeys were never easy. It is only when their families, investors, and society make conscious attempts to pull down gender walls, women can shine in the corporate world.

H.P. Singh

Chairman & MD, Satin Creditcare Network Ltd

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