For women, obtaining a loan can prove to be an arduous task. From a lack of collateral or guarantor, or banks turning them away, women are forced to be at the mercy of private lenders, who often charge exorbitantly high rates of interest and have unreasonable terms and conditions.
As a result, women who need money find it difficult to undertake long-term investments such as buying fixed assets or starting their ventures.
However, several government-owned banks and private financial institutions offer personal loans for women at subsidised rates and relatively lenient terms and conditions. Moreover, certain schemes offer personal loan for homemakers, Mahila group loan, and so on.
Types of Women-Only Loan Schemes
Women require a loan for various reasons. Be it to acquire a property, finance their education, start their own business, or manage expenditures such as those on their wedding, travel, or medical bills; a loan can serve more than one purpose. Hence, several schemes are available that provide a loan to women at low rates and in a hassle-free way.
Let us take a look at some of the women-only loan schemes available in the market right now:
1. Mahila Samridhi Yojana
The Mahila Samridhi Yojana is a Mahila loan scheme that also acts as a micro-financing scheme. This loan facility offers a rebate in the rate of interest, along with financial assistance of up to Rs. 1.4 lakhs. The moratorium period, or the duration until which the loan payment can be postponed is three months, while the repayment period is within 3.5 years and takes place in instalments paid every quarter from the date of every disbursement, including the moratorium period. 95% of the loan amount is sanctioned by the Mahila Samridhi Yojana, while the remaining 5% is provided by the State Channelizing Agencies (SCAs).
The eligibility criteria to acquire a loan under the Mahila Samridhi Yojana is that women entrepreneurs should belong to one of the backward classes or a self-help group (SHG). Women who require such a loan should have attained at least 18 years and have an annual income of less than Rs. 3 lakhs, be a beneficiary under the below poverty line (BPL) and have no previous criminal record.
Women only require to submit their voter ID, self-help group membership card, an income certificate issued by the competent authority, an Aadhaar card, a caste certificate, a bank account passbook, a passport-size photograph, and a proof of residence, which can be provided through their ration card or electricity bill.
2. Oriental Mahila Vikas Yojana Scheme
The Oriental Bank of Commerce offers this loan to women who have a 51% stake in the capital, with a 2% loan concession being offered to such female entrepreneurs. The loan amount under this scheme ranges from Rs. 10 lakhs to Rs. 25 lakhs.
3. Udyogini Scheme
Under the Udyogini scheme, women aged between 18 and 45 years and working in the agricultural or rural sector are offered loans of up to Rs. 1 lakh, provided their annual income does not exceed Rs. 45,000. A 30% concession is also provided to women belonging to the SC/ST category, widows, and destitute women.
4. Annapurna Scheme
The State Bank of Mysore offers loans of up to Rs. 50,000 to women under the Annapurna Scheme. For a woman to be eligible under the Annapurna Scheme, she should have started or planned to launch a food industry venture. The loan amount aims to help women procure kitchen-related equipment such as utensils and other accessories. This loan’s duration is three years, and the EMI for the first month is waived off. The interest rates on these loans are dependent upon the current market rate, and a guarantor is required to process the loan.
5. Bhartiya Mahila Bank Business Loan
The Bhartiya Mahila Bank Business Loan is a loan whose mission is to assist underprivileged women who wish to start their own entrepreneurial ventures. For those women who wanted to start was sanctioned to allocate a business in the manufacturing sector, the scheme had been sanctioned to allocate loans of up to Rs. 20 crores, while if a business venture falls under the category of Credit GuaranteeTrust for Micro and Small Scale Enterprises, the Bhartiya Mahila Bank could offer loans of up to Rs. 1 crore.
The loan duration is seven years with an interest rate of 10.25%, although an additional 2% is levied on loans for women who are in greater need of capital.
6. Mudra Yojana Scheme for Women
The Mudra Yojana Scheme for Women is the central government launched a Mahila loan Yojana to support women entrepreneurs who aspired to start their ventures such as beauty parlours, tuition centres, stitching shops, or any other business that could be set up with minimum efforts and capital. This loan scheme does not require any collateral and can be offered to a single woman or a group of women who want to launch a business venture collectively.
7. Tarun Loan
For already established businesses, the Tarun Loan is suitable since they can avail loans of up to Rs. 10 lakhs to further expand their operations. An important feature of this loan scheme is that women entrepreneurs are provided with a Mudra card, and it functions like a credit card, with a limit of up to 10% of the total loan amount sanctioned to the borrower.
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Q. Are loans to women offered at subsidised rates?
Ans. Although there are several loans that are offered to women at lower than the current rates, certain loans are provided at the prevailing rate of interest. For example, under the Annapurna Scheme, loans are made available at current market rates.
Q. What all documents are required to apply for a woman-only loan?
Ans. The documents required vary depending upon which loan scheme you are applying for. However, you need to produce the required ID proofs at most places, such as an Aadhaar card, voted ID, passport-size photographs, and proof of residence. Some loan schemes also require you to show your caste certificate, in case the loan caters only to those belonging to SC/ST category and other backward classes. Others may require a ration card and proof that you are a beneficiary under the Below Poverty Line (BPL) scheme.
Q. Is there any down-payment required for women-only loans?
Ans. No, there is no down-payment needed for women-only loans. However, ensure that you read through the terms and conditions of the loan you want to apply for, in case there are any changes.
Q. What is the maximum amount that can be borrowed under women-only loan schemes?
Ans. The maximum amount of loan that can be offered varies from bank to bank. While some offer loans of up to Rs. 50,000, others offer amounts as high as Rs. 20 crores.
Q. Do I need to have my own business before applying for a loan?
Ans. It is not necessary that you need to have your own venture before applying for a loan, although many of the women-only loan schemes cater to women who either have their own business or wish to start their own.