MSME - Business Loan For Startup Women Entrepreneurs

Trusted by over 5,000 businesses across 20+ cities and towns. Loans worth over 500 crores sanctioned so far.

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Trusted by over 5,000 businesses across 20+ cities and towns. Loans worth over 500 crores sanctioned so far.

MSME - Business Loan For Startup Women Entrepreneurs in 2023

According to recent studies, women entrepreneurs in India have been steadily increasing, and with the government’s support through various schemes and policies, they have been able to make a significant impact on the economy.

If you’re a woman looking to start or expand your business, an MSME business loan can be a great option to consider. Here’s everything you need to know about MSME business loans for women in India.

What is the Eligibility Criteria for Startup Women Entrepreneurs MSME Loan?

  • To avail of an MSME loan for female entrepreneurs, the business should be registered under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
  • The company/firm should be fully owned by Women Entrepreneurs
  • All the businesses into Manufacturing, Trading and Services are classified as MSME and are eligible for MSME loans subject to other credit parameters as prescribed by the Financial Institutions
  • Any MSME including a startup is also eligible
  • Applicants should be 18  years and above
  • Applicant with good credit score and repayment history
  • The firm/company must have procured all the relevant statutory permissions and licenses to start with Business

What are the Benefits of MSME Business Loans for Women?

    • Lower Interest Rates: Women entrepreneurs are offered lower interest rates on MSME business loans compared to their male counterparts.
    • Collateral-free Loans: Most banks and financial institutions offer collateral-free loans for MSMEs up to a certain amount. This means that women entrepreneurs can get loans without pledging any assets as collateral.
    • Flexible Repayment Options: MSME business loans come with flexible repayment options, which makes it easier for women entrepreneurs to repay the loan.
    • Government Support: The government of India has launched various schemes and policies to support women entrepreneurs. These schemes make it easier for women to access MSME business loans.
    • Govt. Subsidies: Any MSME firm/company which is fully owned by Women Entrepreneurs involved into manufacturing is entitled for Government Subsidy 

What is MSME Loan Subsidy for Women?

There are multiple Government Subsidy schemes for MSME Loan in India. These Subsidies are given by various state Governments as well as Central Government too. Eligibility for Government Subsidy for Machinery Loan depends on which loan the MSME has availed to buy machinery.

Women Entrepreneurs get additional subsidy of 10%  compared to their male counterparts.

What is the MSME Loan Interest Rate for Women?

Interest rates offered for MSME Loans may vary depending on business requirements and the financial institution. It may also vary based on the credit facility and the end utilization. However average cost of interest for Machinery Loan ranges from 6% to 13% per annum. Women Entrepreneurs get additional discount to the tune of 1% per annum compared to their male counterparts.

What are the types of MSME Loan for Women?

MSME Loan comes in both Unsecured and Secured form. Further It’s been divided into Fund Based Limits and Non Fund Based Limits. 

Fund Based MSME Loan:

  • Cash Credit (CC)
  • Machinery Term Loan (TL)
  • Project Term Loan (TL)
  • Export Packing Credit (EPC)
  • Packing Credit Foreign Currency (PCFC)
  • Bills Discounting (BD)

Non Fund Based Working Capital Loan:

  • Letter of Credit (LC)
  • Guarantee (BG)

What are the Documents Required for MSME Loan for women?

  • KYC documents of the applicants along with the firm/company, such as PAN Card, Aadhaar, Udyam, Utility Bills (Water and Electricity Bills)
  • Relevant Business Licenses 
  • Project Report/CMA Data
  • Additional documents, as required by the financial institution

What about MSME Loan without Collateral Security for Women? (UNSECURED MSME LOAN)

Under Government sponsored CGTMSE scheme, any Women Entrepreuner into MSME Business irrespective of number of years in business is eligible for MSME Loan Without Collateral Security