Capital Made Easy for She-Preneurs

For once which was a society wholly and solely dominated by men is no more a viable truth, instead people have started to observe, appreciate and believe the flight of the feminine feathers. Indian women has taken the lead and has hence proved that despite creating a magical balance for a perfect sustainable personal life and are still performing well passionately at the workplace to give edgy competition at every step.

A Light of Hope – MSME’s

The micro, small and medium enterprise (MSME) sector in India is credited with generating high rates of employment growth and accounting for a major share of industrial production and exports. Production from the MSME sector accounts for 15% of India's GDP and the sector is estimated to employ around 70 million people.

The Real Challenges

Women MSMEs in India play a critical role here. They collectively employ over 8 million people, contributing 3.09 % of industrial output. Yet few Indian women seem to take up early-stage entrepreneurship compared to men. Only 33% of early stage entrepreneurs in India are women (GEM, 2014). India also exhibits the third highest gender gap in entrepreneurship globally. This can be attributed to the many barriers that women entrepreneurs face both in starting and scaling up a business - access to education and training, legal and cultural barriers and infrastructure-related challenges, among others. But the biggest disadvantage faced by women-owned MSMEs is their inability to access capital to meet the growth needs of their business.

Credit constraints have been cited as a reason for discontinuing their businesses by 43% of women entrepreneurs, as compared to just 26% of the male entrepreneurs (GEM, 2014). Access to financial resources was observed to be the greatest constraining factor in the entrepreneurial ecosystem for women in India by the Gender GEDI Index (2014) and Women Entrepreneurial Environment Index (WEEI). There are a number of institutional challenges that hinder women's access to finance - lack of collateral, lack of credit history and limited financial literacy. A number of cultural and social biases act against women seeking access to institutional credit too. Ramesh Dharmaji,Chief general Manager, SIDBI states, “Almost 98% of the women owned enterprises are in the micro enterprises category and less than 2% in the small enterprises category. Further, almost 50% of the women MSMEs are in the manufacturing sector compared to 70% of men owned MSMEs concentrated in the manufacturing sector.”

About 73% women entrepreneurs failed to get funding from Venture Capitalists (VC). A study based in Karnataka found that about 90% women had only their own funding to rely on, while 68% found it tougher to get bank loans. All that is set to change once the Stand Up India scheme comes into action.

‘Women’ The Better Entrepreneurs

S.M Swathi, Executive Director, Bhartiya Mahila Bank, “Women are more serious than men in terms of putting up the project execution, completion, earning profit and also are good paymaster. By and large they do not default.”

Now a day’s many educated women are also moving towards entrepreneurship and are also aware of the various legal/statutory requirements while carrying out the business/ profession. Actual requirement of loans by women is at an increasing rate as more and more women want to have financial independence. Those who are availing the loans are at par with their counterparts. However, the percentage of women availing the loan is much lower than men.

“India's growth rate can make a quantum jump of 4.2 per cent if women in the country get equal opportunity in the core sectors of the economy.” - Lakshmi Puri, Assistant Secretary - General of UN Women.

Giving a Helping Hand

All the major banks offer same products meant for women who have different names and other beautifications. Some of the schemes are as following:

Annapurna Scheme:

The scheme is meant for women entrepreneurs who want to set upfood catering units.

The maximum loan amount provided on this composite term loan is Rs. 50,000.

Dena Shakti Scheme

This scheme offered by Dena Bank and aims at providing financial assistance to women entrepreneurs.

Women benefit from a 0.25% reduction on the interest rate.

This loan is available for entrepreneurs engaged in agriculture, manufacturing, micro-credit, retail stores or small enterprises.

Cent Kalyani Scheme

This scheme has been launched by Central Bank of India.

It is available for women employed in village and cottage industries, micro, small and medium enterprises, self-employed women, agriculture and allied activities, retail trade and government sponsored programmes.

The interest rate varies from one sector to another and is based on market rates.

Mahila Udyam Nidhi Scheme

This scheme has been launched by Punjab National Bank.

This scheme is mainly targeted towards the small-scale sector.

Women entrepreneurs can get a loan up to Rs. 10 lakhs.

This soft loan is repayable within 10 years.

There are special loans catering to beauty parlours, day care centres, buying auto rickshaws, two wheelers and cars.

Even in BMB, there are a good number of women centric products like any other Public Sector Banks. But then, how it differs from other Bank product is as following:

Lower rate of interest to women from 0.25% to 1% depending upon the internal ratings of the borrower.

Loans upto 1.00 Cr and large are covered under the CGTMSE which are eligible under the scheme, without insisting for collateral security as we know that majority of women in our country do not even own immovable property.

Swathi: “Sense of belongingness as the women in our country feel Bhartiya Mahila Bank is their bank that is formed by the Government of India and there is a warmth and smile on the part of the staffs when clients enter into their branches.”

Up course repayment is always for the maximum possible period with sufficient moratorium period and based on cash flow.

Stand Up India

In January 2016, Prime Minister Narendra Modi had launched the Start-Up India scheme, which gave new entrepreneurs a chance at making it big. Under the scheme, entrepreneurs could get loans from banks to kick start their businesses. However, a new scheme, launched on April 5, will shift the focus to SC/ST and women entrepreneurs, to promote inclusivity.

The Stand Up India scheme provides loans to entrepreneurs of the Scheduled Caste and Scheduled Tribes, as well as women. The loans range from Rs 10 lakh to Rs 1 crore.

The scheme helps not just those who are in the initial stages of their entrepreneurial plans, but also those who have already set up their company but still fall under the start-up category. Under the scheme, the government has opened refinancing options through Small Industries Development Bank of India (SIDBI), at an initial amount of Rs 10,000 crore.

What Needs to be Done

Despite, observing the current increase in the ratio of women opting for entrepreneurship, there is still a very huge lot that needs to be educated about the trail of entrepreneurship and how one can achieve it while overcoming the major financial barriers.

Proper Literacy program on a regular basis to our women on various aspects, especially on Banking is a must. Luckily the government is doing a lot for women empowerment in all the fields. Women need to identify their own desire and strength considering other external factors like Location, where she stays, availability of electricity, water, and professional, marketing facility etc. Once at least 50% of the requirement is available, one should not stop. Initiate the action initially in a small way and convert it into a big way.

The economic empowerment of women of a country leads to exponential growth of the country. Every woman has her own individual strengths and skills. We believe that empowerment of every woman from all strata of society is vital for the growth of the entire nation.