The equal participation of women characterises the modern business world. The government has recognised the power of business in transforming women’s lives from different social and societal backgrounds. The several govt schemes for women entrepreneurs are a testament to the government’s commitment to this cause.
IF you’re a woman and aspiring to enter the MSME business world, a knowledge of these schemes can help you get started. In this article, we talk about ten such stellar govt schemes for female entrepreneurs in India in detail and how they’re taking the cause of gender equality forward in the modern MSME business landscape.
Why Government Schemes Matter for Women Entrepreneurs
Government schemes have a crucial role to play in helping women entrepreneurs overcome the financial and structural barriers involved in starting a business. Access to timely funding through government MSME loans for women also goes a long way in reducing dependence on personal savings or informal borrowing.
These initiatives make loans for women to start business in India more affordable through lower interest rates, relaxed collateral norms, and skill support. This is especially important for first-generation entrepreneurs to build confidence. By combining credit access with training and market linkage, such schemes create a supportive ecosystem that enables women to start and sustain businesses with greater financial independence.
Top 10 MSME Loan Schemes for Female Entrepreneurs in India
The MSME sector that once brimmed with businessmen is now welcoming women from different social and societal backgrounds with open arms. The launch of various government schemes for female entrepreneurs in India has also encouraged women to come forward.
Here is a look at some of the top government schemes for women entrepreneurs entering the MSME world that can be found beneficial.
Annapurna Scheme: Collateral-Free Catering Business Loan
Many women are incredible chefs and can benefit economically by establishing their catering businesses. This government scheme for female entrepreneurs in India aims at supporting women who wish to start a catering unit. The Annapurna scheme allows women to borrow up to Rs. 50,000. This loan can be repaid in 36 total instalments and requires collateral and a guarantor for approval. The collateral for Annapurna scheme loans is taken in the form of assets.
Pradhan Mantri Rozgar Yojana: Skill Development & Self-Employment
It is one of the most important govt schemes for women entrepreneurs. The purpose is to provide women with skill-based self-employment opportunities. This program applies to all types of businesses in the manufacturing, trade, and service sectors.
The maximum loan subsidy amount is 15% of the project costs, with a per-borrower cap of Rs 12,500. The maximum loan for a business is Rs. 2 lakhs, whereas the maximum loan for a service industry is Rs. 5 lakhs.
Mudra Yojana: Collateral-Free Loans for Small Businesses
One of the most popular Indian government schemes for women entrepreneurs in India, the Mudra Yojana scheme allows women to start different types of small or medium-sized companies including beauty parlours, tuition centres, tailoring shops, etc. The lower limit for the amount sanctioned under this government loan for women for business in India is Rs. 50,000, while the upper limit is Rs. 50 lakhs.
If the borrowed amount is less than Rs. 10 lakhs, the borrower does not have to give a collateral. The three categories of Mudra Yojana loans for women are:
Shishu: The upper limit for Shishu loans is Rs. 50,000 and they can be used for business establishment.
Kishor: Starting at Rs. 50,000 and going up to Rs. 5 lakhs, these business loans for women are meant for well-established enterprises.
Tarun: Tarun loans help with business expansion. They range between Rs. 5 lakhs and Rs. 10 lakhs.
Cent Kalyani Scheme: Women Entrepreneur Business Loan
Another of govt schemes for women entrepreneurs is Cent Kalyani Scheme. Under the Cent Kalyani Scheme, the Central Bank of India offers women entrepreneurs loans for running a business in sectors like retail and agriculture. These loans do not require any collateral or guarantor and can go up to Rs. 1 crore.
The interest rate on loans depends on market rates. The maximum loan repayment period is seven years.
Mahila Coir Yojana: Subsidy for Coir Processing Equipment
This government schemes for female entrepreneurs in India provides women with spinning machines at reduced prices after training completion. Women starting their own coir business can get spinning equipment to process coir at 75% lower prices.
This program also covers 25% of the project cost and is available to rural women over 18 years of age.
Stand Up India: SC/ST/Women Business Loan Scheme
The Stand-up India scheme is a government schemes for female entrepreneurs in India targeted at women and other marginalized communities. Under this scheme, the government aims to provide loans to one scheduled caste, scheduled tribe, and woman per bank branch. Women can obtain loans ranging from Rs 10 Lakhs to 1 Crore to start or expand their businesses.
Under this govt scheme for women entrepreneurs known as stree shakti yojana, women are eligible for a 0.05% concession on loan amounts over Rs 2 Lakhs, along with additional benefits. This scheme is open to all women entrepreneurs. A key eligibility requirement is enrolment of women entrepreneurs in the Entrepreneurship Development Program (EDP) is enrolled in the
Udyogini Scheme: Low-Interest Women Entrepreneur Loan
This government scheme for women entrepreneurs is aimed at making women self-reliant and helping them in self-development via economic help. Under this udyogini scheme, the government provides loans to women entrepreneurs at lower interest rates compared to commercial banks. Women with a family income of less than Rs 40000 are eligible for this scheme.
Mahila Udhyam Nidhi: Equity Gap Funding for Women MSMEs
This government scheme (mahila udhyam nidhi) for women entrepreneurs in India aims to promote gender equity by providing financial assistance to women entrepreneurs in MSMEs and small-sector businesses at lower interest rates. The loan limit offered under this scheme is 10 Lakhs with a repayment tenure of a maximum of 10 years.
TREAD Program: Grants & Training for Women Entrepreneurs
The Trade-Related Entrepreneurship Assistance and Development (TREAD) program aims to empower women by giving them the funding they need for projects involving training, counselling, and the skills they need to manage the companies successfully.
This government scheme for women entrepreneurs aims to increase the business acumen of women. The government contributes up to 30% of the final project cost under this program, as determined by the financial institutions. The remaining 70% of the project’s costs is provided as a loan by the lending institution so that the activities outlined in the project can be carried out.
While different government schemes for female entrepreneurs in India have their own eligibility requirements for loans for women to start business, here are some common criteria applicants must meet:
Gender and Ownership: The applicant must be a woman and the business should be owned/controlled by her (often over 50% ownership).
Business Type: Enterprise can be in manufacturing, trade, or services under the MSME definition or recognised by relevant scheme guidelines.
Entrepreneur Status: Both new and existing women entrepreneurs can apply, depending on the scheme.
Age Range: Typically between 18–60 years (varies by scheme and lender).
Business Plan: A feasible business plan or project proposal may be required for loan evaluation.
Credit and Financials: Some lenders consider credit history, financial viability, and repayment capacity; collateral requirements may be relaxed for government-backed loans.
Required Documentation for Women Entrepreneur Loan Applications
While documentation requirements may vary across government schemes for female entrepreneurs in India and individual lenders, the following are some common documents typically required:
Identity Proof: Aadhaar Card, PAN Card, Voter ID, or Passport
Business Proof: Udyam (MSME) Registration Certificate or proof of business incorporation
Ownership Proof: Documents showing minimum 51% ownership by a woman entrepreneur
Business Plan / Project Report: Outline of business model, funding requirement, etc.
Bank Statements: Personal and/or business bank statements for the last 6–12 months
Income Proof: ITRs (if applicable) or basic financial statements for existing businesses
Photographs: Recent passport-sized photographs of the applicant
How to Apply for MSME Loans for Women: Step-by-Step Guide
Here is a step-by-step process commonly followed across banks and government scheme lenderswhen applying for an MSME loan for women:
Step 1: Identify the Right Scheme Shortlist suitable government schemes for female entrepreneurs in India offering loans for women to start business in India based on your business type and funding needs.
Step 2: Register Your Business Complete Udyam (MSME) registration or ensure your business is formally registered, as most schemes require this.
Step 3: Prepare a Business Plan Create a basic project report outlining business activity, loan amount required, and repayment capacity. This is especially important for first-time applicants.
Step 4: Gather Required Documents Keep KYC, business proof, bank statements, and ownership documents ready for a loan for women entrepreneurs in India.
Step 5: Submit the Application Apply online via bank portals or government platforms, or visit a participating bank or NBFC branch.
Step 6: Loan Assessment and Approval The lender evaluates eligibility, credit profile, and viability before approving and disbursing the loan.
While Tata Capital does not offer government schemes for female entrepreneurs in India, it does offer easy MSME loans for women.
Tata Capital’s business loan for women entrepreneurs in India is designed to support female entrepreneurs with easy access to funds for business setup, expansion, working capital, equipment purchase or inventory needs. Women entrepreneurs enjoy flexible and collateral-free financing, competitive interest rates, structured EMI options, and quick processing to grow their enterprises with fewer hurdles.
Below is why borrowers choose Tata Capital for its easy loans for women entrepreneurs in India:
High Loan Amounts: Loans up to ₹90 lakh to meet various business needs.
Flexible Tenure: Repayment tenures typically up to 60 months to suit cash flow cycles.
Competitive Interest Rates: Attractively priced loans with rates that vary based on profile and business.
Collateral-Free: Tata Capital does not demand collateral on its MSME loans for women.
Customised EMIs: Borrowers can structure their EMIs to suit their needs and budget.
Easy Application: Apply online or offline with a streamlined process and minimal documentation.
Comparing Government Schemes vs. Private Lender Options
Interest Rates:Government schemes for female entrepreneurs in India are often subsidised, making them suitable for long-term affordability. Private lenders may charge higher rates but offer quicker access to funds.
Collateral Requirements: Many government-backed loans for women to start business in India come with relaxed or no collateral norms. Private lenders may also offer collateral-free loans, but this depends on the lender.
Processing Time: Government schemes can involve longer approval timelines due to formal checks and documentation. Private lenders generally provide faster processing and quicker disbursal.
Eligibility Flexibility: Government schemes are structured with defined eligibility conditions. Private lenders offer more flexible eligibility for an MSME loan for women, especially for established businesses.
Aspect
Government Schemes for Women Entrepreneurs
Private Lender Options
Interest Rates
Lower and often subsidised, suitable for long-term affordability
Generally higher, based on credit profile and business performance
Collateral Requirement
Relaxed or no collateral under many schemes
May be collateral-free, but depends on eligibility and turnover
Processing Time
Longer approval timelines due to formal procedures
Faster processing and quicker disbursal
Eligibility Criteria
Clearly defined and scheme-specific
More flexible, especially for established businesses
To sum up, government schemes are well-suited for those seeking affordable finance, longer-term stability, especially first-time or small-scale entrepreneurs. Private lenders, on the other hand, offer speed, flexibility, and simpler processes, making them a practical choice for women with established businesses and immediate funding requirements.
The right option depends on the stage of the business, urgency of funds, and repayment capacity.
Key Challenges for Women Entrepreneurs & How Schemes Help
Women entrepreneurs in India still face several challenges. These include:
Limited Finance
Women entrepreneurs don’t have as much access to finance as men. According to an IFC report in 2022, 90% of women entrepreneurs had not taken a loan from a formal financial institution.
Access to Professional Network
Another challenge faced by women entrepreneurs is access to professional networks. According to a survey by Google Bain, 49% of respondents reported a lack of professional support resulting from restricted inclusion in professional networks.
Lack of Training
A large section of women entrepreneurs report a lack of training as an impediment to business expansion.
Conclusion
While these government schemes for women entrepreneurs are excellent, women in business can also opt for NBFC loans. Tata Capital offers one of the most hassle-free MSME loans in India. To promote women empowerment, loans from Tata Capital guarantee quick approval and disbursement. Tata Capital SME business loans for women have a starting interest rate of 19% and a flexible and customized EMI schedule. We offer both online and offline application modes for all our business loans. You can find the relevant eligibility and documentation details on our website.
Contact us today to know more about Tata Capital loans for women in business.
Which of the following schemes is related only to women's entrepreneurship?
Some schemes related to women's entrepreneurship are: Annapurna Scheme, Pradhan Mantri Rozgar Yojna, 3. Mudra Yojana Scheme, Cent Kalyani Scheme, Mahila Coir Yojana.
How do female entrepreneurs get a loan?
Female entrepreneurs can get a loan at low interest rates by applying for one of the govt schemes for women entrepreneurs in India.
Where can I find information about these schemes?
You can find information on some of these govt schemes for women entrepreneurs on various government portals, newspapers, internet searches and online articles. You can also contact various government departments to ask about a particular scheme.
What is the Beti Bachao Beti Padhao scheme?
The aim of the government behind Beti Bachao Beti Padhao scheme is to eliminate female foeticide and improve female education levels in some North Indian states.
How do government schemes affect society?
Central, state and local governments launch government schemes to address critical social issues in India, including improving citizens' education, healthcare, employment, and living standards.
How much can women borrow under the Mudra Yojana for business startups?
Under the Mudra Yojana, women entrepreneurs can borrow up to ₹10 lakh for business startups or expansion. The loan amount is categorised under Shishu, Kishore, and Tarun, based on the stage and funding requirement of the business.
Are government schemes for women entrepreneurs collateral-free?
Many government schemes for female entrepreneurs in India offer collateral-free loans, especially for smaller amounts. However, this depends on the specific scheme, loan size, and lender guidelines, as some higher-value loans may still require security.
What is the interest rate concession under Stree Shakti Yojana?
The Stree Shakti Yojana generally offers an interest rate concession of around 0.5% on business loans. This benefit is applicable to women entrepreneurs who meet the scheme’s ownership and eligibility criteria.
Can women access loans under Stand Up India without SC/ST status?
Yes, women entrepreneurs can apply for loans under the Stand Up India scheme even without SC or ST status. The scheme is open to all women borrowers meeting the business and eligibility requirements.
How does Tata Capital's women entrepreneur loan compare to government schemes?
Tata Capital’s MSME loans for women entrepreneurs offer faster processing and flexible terms, while government schemes focus on lower interest costs and long-term support. The choice depends on funding urgency, business stage, and repayment comfort.
