A study conducted by NITI Aayog revealed that India has 63 million micro, small, and medium enterprises (MSMEs). These MSMEs have a 30% contribution to the Indian GDP. However, out of these 63 million, only 20% of enterprises are owned by women.
The study also estimates that by boosting women-owned businesses, India could generate more than 150 million jobs. To tap into this potential, the Government of India launched the Udyogini Scheme to specifically empower women entrepreneurs across the country.
This article provides an in-depth view of the scheme and why it can potentially transform how women conduct their businesses in India.
What is the Udyogni Scheme?
The Udyogini scheme was launched by the Government of India to promote entrepreneurship and economic empowerment of women in India. The scheme aims to assist women from all sections of society to gain self-reliance by setting up micro-enterprises and small businesses.
Under the scheme, women entrepreneurs are provided interest-free loans to help establish micro-enterprises, mainly in the trade and services sectors. The scheme intends to tap into the entrepreneurial potential of women, especially those based in rural and underdeveloped areas of the country.
The following are the key objectives of the PM Udyogini Yojana scheme:
1. Encourage women to avail of loans from financial institutions for their enterprises.
2. Make financial assistance easily accessible to women from marginalised sections like SC, ST and special categories at lower interest rates.
3. Provide interest-free loans to eligible women beneficiaries without any discrimination.
4. Ensure entrepreneurship and skill development of women through training programs on the basics of business.
Udyogini Scheme details
Here are details of the Udyogini Scheme:
Category
Scheme features
Interest rate
Competitive, subsidised, or waived for specific qualifying cases
Loan amount
Available for a maximum amount of Rs. 3 lakhs
Annual family income
Annual income of Rs. 1.5 lakh or less
Collateral
Collateral is not required for obtaining loans under this scheme.
Processing fee
No processing fee is charged for loan applications under this scheme.
Features of the Udyogini Yojana scheme
Here are the features of the Udyogini Yojana scheme for women entrepreneurs-
The loan is available to women entrepreneurs in 88 small-scale industries, including libraries, canteen, catering, security services, and papad making.
Eligible women can apply for a loan of up to Rs. 3 lakhs within the scheme.
The government offers a 30% subsidy on loans.
Eligible businesses within the agricultural sector can also avail of interest-free loans.
The scheme also provides training to women for skill development.
Benefits of the Udyogini Scheme
By providing easy financing, capacity building and enterprise support, the Udyogini scheme empowers women to start and run businesses successfully, thereby promoting livelihoods and financial independence.
The Udyogini scheme offers several benefits to support women entrepreneurs in India:
Udyogini Scheme interest rate: Women entrepreneurs belonging to special categories like widows, destitute and differently-abled can avail of interest-free loans under the scheme for setting up micro-enterprises and small businesses.
High-value loans: Eligible women entrepreneurs can get loans up to Rs 3 lakhs if they meet the required eligibility criteria. The funding provides sufficient capital to start enterprises. This also promotes inclusive growth by supporting vulnerable sections of women entrepreneurs.
Covers 88 industries: The scheme offers financial assistance for establishing 88 types of small-scale industries. Women in the agriculture sector can also avail interest-free loans.
Skills training: Entrepreneurship development training is provided, covering business basics like planning, pricing, costing, feasibility assessment, etc. This equips women with enterprise management skills.
Subsidy on loans: To ease repayment burdens, the scheme offers up to 30% subsidy on loans sanctioned to women entrepreneurs.
Udyogini Scheme eligibility criteria
The Udyogini scheme offers business loans exclusively to women entrepreneurs to help them start or grow their enterprises. The key eligibility criteria to avail loans are:
Applicants must be women entrepreneurs who want to start or expand a business venture. The scheme is aimed at supporting women’s entrepreneurship.
They must have a good credit history with no defaults on past loans from any financial institution. This ensures their creditworthiness.
Women entrepreneurs should have the capability to repay the loan based on a stable income source.
Documents required to avail of loans under the Udyogini Scheme
Women entrepreneurs need to submit certain documents when applying for loans under the Udyogini scheme. The key documents required are:
Filled application form along with passport-sized photographs
Identity proof like an Aadhaar card, birth certificate, etc.
Income proof and address proof
Below Poverty Line (BPL) card and ration card, if applicable
Caste certificate for applicants belonging to reserved categories
Copy of passbook with account details, IFSC code and MICR code
Any other documents specified by the lender providing the loan
How to apply for loans under the Udyogini Scheme?
Here are the steps to follow when applying for a loan under the Udyogini scheme:
Obtain the application form from a lender who provides loans under this scheme. The Udyogini online application form can be downloaded by visiting the website of a partner financial institution.
Fill the application form accurately with all the required details. Ensure no information is missing.
Attach copies of the necessary documents mentioned in the application form, like identity proof, income proof, etc.
Submit the completed loan application form along with documents to the lender. Alternatively, to apply for a Udyogini loan, apply online on the lender’s website.
The lender will verify the application and approve loans for eligible applicants under the scheme. Once the loan is approved, the amount will be disbursed to the borrower’s account.
Udyogini Scheme Interest Rate
The Udyogini scheme offers interest-free loans to women entrepreneurs with small businesses.
Under the scheme, disabled women, Dalit women and widows qualify for interest-free loans.
Women from other categories can also avail of loans under the Udyogini scheme but at a 10% to 12% interest rate on the loan amount.
Eligible applicants can also avail a 30% subsidy on the loan based on their family’s annual income.
Moreover, the government also regulates the interest rate depending on where you’re applying from.
Wrapping up
The Udyogini Scheme has opened up new possibilities for women entrepreneurs in India to gain financial and skill support for their entrepreneurial aspirations. By providing easy access to formal credit, training and incubation support, the scheme aims to harness the entrepreneurial capacity of Indian women.
If you own a small business, you can get the right financial support of up to Rs 90 lakhs with Tata Capital. Our business loans for MSMEs feature a tenure of 12 months to 60 months and a competitive interest rate.
Moreover, you can benefit from our customisable loan products to suit your exact funding needs. Our collateral-free MSME loans are ideal for fulfilling your working capital requirements. Lastly, we require minimal documents for a business loan and make the entire process hassle-free. Tata Capital’s business loans for women-owned enterprises can help you take your business to new heights.
For more details, visit the Tata Capital website or download the Tata Capital App today!
The details mentioned in this blog may change from time to time and from vendor to vendor or government policies.
You can apply for a loan under the Udyogini scheme from various commercial banks, regional rural banks (RRBs), district cooperative banks, private banks, and non-banking financial institutions.
Can I apply for the Udyogini scheme for homestay?
The benefits of the Udyogini scheme are only available to women entrepreneurs looking to set up a business or enterprise. So you cannot apply for the scheme for a homestay.
What is the purpose of the Udyogini Scheme?
The Udyogini Scheme aims to empower women entrepreneurs and encourage the Small Scale Industries (SSI) sector by providing financial assistance and creating employment opportunities.
How much loan I can get under the Udyogini scheme?
The maximum loan amount eligible women entrepreneurs can apply for under this scheme is Rs. 3 lakhs.
Who introduced the Udyogini scheme?
The Ministry of Women and Child Development, Government of India, initiated the Udyogini Scheme to promote and support women entrepreneurship in India.
How much loan can you get under the Udyogini scheme?
Under the Udyogini scheme, you can avail of a maximum loan amount of Rs. 3 lakhs.
What is the age eligibility to apply for the Udyogini scheme?
Women entrepreneurs between 18 and 55 years old are eligible for a loan under the Udyogini scheme.
19 December 2024
6 mins read
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