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Kotak e-Term

Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**
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Ref. No. KLI/22-23/E-BB/492

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Government Schemes for Women Entrepreneurs in India

Modern women emphasize more on their financial planning to lead an independent life. There are numerous strategies available for women to achieve their objectives with a high likelihood of success.

  • 32,100 Views | Updated on: Sep 26, 2024
Term Insurance Plan for Women
हिंदी में पढ़ें

Indian women have come a long way from when they were financially dependent on men. Today they take charge of their finances and make their own decisions. To encourage and motivate them, several government initiatives are especially focused on improving the financial independence of women. And even though many working and self-employed women are aware of such benefits and financial opportunities, there are several other women who are completely unaware of this advantage.

Govt Schemes for Women in India

Time and again, the Indian government has taken significant steps to increase awareness amongst women regarding advantageous government schemes for women.

Beneficial Monetary Schemes for Women Entrepreneurs

The government has also launched several government schemes for women entrepreneurs. For example, the Bhartiya Mahila Bank (BMB) business loan scheme is for women who wish to start their own businesses. The scheme provides loans up to ₹20 crores for women-owned manufacturing companies at an interest rate of 10.15%. The scheme also provides collateral-free loans up to ₹1 crore for micro and small enterprises.

Another government-backed monetary initiative for women is the Annapurna Scheme. The program aims to financially support women in establishing a food catering business. The program grants loan up to ₹50,000 to allow women to buy utensils, kitchen tools, and other equipment for the business. The interest rate varies per the market standard and the concerned bank. The loan amount is to be paid back in three years.

Apart from these two popular schemes, there are other monetary schemes launched by the government to promote women entrepreneurs in the country.

TREAD (Trade-Related Entrepreneurship Assistance and Development) scheme

TREAD aims to economically empower women by offering them credit, training, development, and counselling support in the space of products, services, trades, etc.

Mahila Shakti Kendra

This government-sponsored program was launched in 2017 to financially empower women by providing skill development support, digital literacy, employment, and more. Each Shakti Kendra (at national, state, district, and block levels) offers an interface for rural women to avail benefits via training and capacity building.

Mahila-E-Haat for Women Entrepreneurs

The Ministry of Women and Child Development governs this program. Started in 2016, Mahila-E-Haat is a bilingual marketing platform that uses technology to enable budding women entrepreneurs, self-help groups, NGOs, and others to promote their products and services.

Stree Shakti

Stree Shakti provides a personal loan to help women expand their businesses. Women must own 50% of the business to qualify for this loan, and they are eligible for loans up to ₹50 lakhs under this program. It makes it simple for women to run a firm, boosting income flow.

Annapurna Scheme

The Indian government offers a number of programs to assist women who want to launch a business. One of them, the Annapurna plan, offers ₹50,000 to start a catering company. Women can repay the loan within three years under one of the central government’s lending programs. The program can be chosen by those who desire to launch a new business to obtain additional benefits.

Orient Mahila Vikas Yojana Scheme

The program is suitable for Indian women who want to develop small businesses and take care of their requirements. The scheme doesn’t demand collateral for loans up to ₹20 lakhs. After receiving a loan under this program to assist in starting a business or firm appropriately, the repayment period is 5 to 7 years.

Mudra Yojana

The Mudra loan program, a governmental effort within India, strives to foster entrepreneurship and extend financial aid to micro and small enterprises. It places particular emphasis on empowering and advancing women entrepreneurs, contributing to the enhancement of women’s entrepreneurial endeavors within the nation. Mudra loans designed for women are accessible with simplified criteria, and loans up to ₹10 lakhs do not necessitate collateral. Furthermore, the program extends preferential interest rates to female entrepreneurs, rendering it an appealing choice for individuals aspiring to initiate or broaden their business ventures.

Economic Empowerment of Women Enterprises and Start-ups by Women

This initiative, established under the Ministry of Skill Development and Entrepreneurship, offers an incubation and acceleration program designed for women micro-entrepreneurs, facilitating the launch of new ventures and the expansion of current ones. Currently, the program is actively running in the states of Assam, Rajasthan, and Telangana.

Stand-up India Scheme

The Stand-Up India Scheme represents a governmental initiative with the primary objective of fostering entrepreneurship within women and marginalized groups. Its focus lies in facilitating financial support through bank loans, ensuring the provision of loans to both a scheduled caste (SC) or scheduled tribe (ST) borrower and a female borrower for the initiation of new ventures. In situations involving non-individual enterprises, it mandates that either an SC/ST entrepreneur or a female entrepreneur must hold a minimum ownership and controlling stake of 51%. This program enables female entrepreneurs to access loans spanning from ₹10 lakhs to ₹1 crore, empowering them to commence or enhance their small-scale enterprises.

Women’s Savings Bank Accounts

Apart from offering the regular savings bank account feature, banks allow women to secure their funds in specially-designed savings accounts that categorically fulfil the financial and investment needs of Indian women today and host competitive features as per modern lifestyle expectations.

Banks further offer significant discounts, cashback rewards, free gifts, etc., for women who use their savings bank account credit or debit card to shop. The offer is also applicable for spending on food, wellness, entertainment, etc.

Apart from these advantages, the women’s special savings bank accounts offer discounted health packages or discounts on services such as medical tests and more. To support women financially, the government also permits women bank account holders to open a ‘Junior Account’ for their children.

Working women can save money in these accounts to cover the education expenses of their children. It is noteworthy that there is no monthly minimum balance requirement if the account is associated with a Recurring Deposit (RD) or a Systematic Investment Plan (SIP).

Low Premiums in Life Insurance Plans

To encourage women to buy insurance plans, the insurer offers special life and health insurance plans. Moreover, most insurance providers charge a lower premium on life and health insurance coverage for women than their male counterparts.

This is also because, as per reports, women have a higher life expectancy rate than men. This reduces the risk of a claim on the part of a women policyholder. Thus, insurers allow them higher sums assured at much lower premiums than men, in general.

On average, women are given a three-year setback on premium charges as compared to men. For example, the life insurance premium for a 40-year-old female and a 37-year-old male would likely be the same. Term plans provide best-in-class insurance benefits at economical premiums with special premium rates for women, enabling them to become more financially independent.

That said, specifically in the case of health insurance, women do not get any advantage on premiums since the premiums are based on the policyholder’s health, family history, age, and other individualistic factors. So, in the same case of a 40-year-old woman and a 37-year-old male, the premiums for the latter health insurance policy will be lower owing to age.

Lesser Interest on Loans Taken by Women

Many leading banks provide home loans to women at lower rate interest. In some cases of joint home loans, the banks also offer discounted loan rates if the woman is the first applicant for the specific loan.

Typically, the difference in the rate of interest is nearly 0.05%. In addition, women also get discounted car loans from banks as compared to their male counterparts. The net interest savings across the period of the loan allow women to save higher, provided the rate of interest remains the same throughout the loan tenure.

This is even more beneficial when families take a large loan via a woman applicant. Apart from low-interest rates, some banks also waive any loan processing charges for women.

If the property is in the name of a woman, some states in India offer financial benefits to women in the form of a lower stamp and transfer duty in case of sale deeds, conveyance deeds, and gift deeds. A few states also completely exempt the stamp and transfer duty on real estate transactions for women.

For instance, in Delhi, the stamp duty charge for a sale deed where a woman is a property buyer is 4%. Whereas the stamp duty for a man is 6%. Similarly, the fee for women is lower than for men regarding conveyance and gift deeds. Further, some municipal corporations also let go of the property tax if the property is in the name of a woman

Working Women’s Hostel for Economical Accommodation

The government has also helped women by launching Working Women Hostels to provide a safe and convenient living space for working women and their families. Women get accommodation, along with daycare facilities for their children.

These hostels are set up across urban, semi-urban, and rural areas. However, these hostels are only available for women whose monthly income does not exceed ₹50,000 per month in urban areas and ₹35,000 per month in other areas.

Sukanya Samridhi Yojana

Sukanya Samriddhi Yojana (SSY) is a government-sponsored scheme launched to benefit the girl child and ensure a brighter future for her. Parents or legal guardians of a girl child under ten years of age can invest in SSY. The scheme has a fixed tenure of 21 years and offers an average rate of return between 8% and 9%. Deposits can be made once every month or on an annual basis for 15 years from the date of the SSY account opening.

The minimum permissible tax-saving investment is ₹1000, while the maximum is ₹1.5 lakhs. The account will be managed after 18 years of age. According to the Income Tax Act, investments in SSY up to ₹1.5 lakhs are eligible for tax savings under Section 80C. Further, the interest income and maturity proceeds of SSY are also tax-free. But the amount from the SSY account can be withdrawn only after the girl is 18 years old, subject to some specific terms.

That said, in some cases, partial withdrawal is allowed for the purpose of higher education of the girl child. This govt. Scheme for women is available with all PSU banks, India Post Office, and some reliable private sector banks.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The initiative launched by the Small Industries Development Bank of India (SIDBI) and the Ministry of MSME aims to offer collateral-free financing solutions to micro and small enterprises. This program encompasses both new and existing enterprises. To implement this scheme, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was established. Under this scheme, eligible borrowers can access credit facilities of up to ₹ 200 lakh without the need for collateral security or third-party guarantee, contingent upon the project’s viability. The guarantee coverage varies, with Micro and Small Enterprises owned or operated by women receiving an 85% guarantee cover, while other borrowers are eligible for up to 75% coverage.

Challenges Faced by Women Entrepreneurs

Embarking on the journey of entrepreneurship presents its own set of challenges, with added complexities for women entrepreneurs. Despite their diligent efforts and honed skills, female business owners frequently encounter heightened difficulties in achieving substantial success and gaining prominent acknowledgment within the business sphere.

Gender Bias and Stereotyping

One of the most persistent challenges that women entrepreneurs face is gender bias and stereotyping. Society often clings to traditional gender roles, leading to a perception that women may be less competent or suitable for leadership roles. This bias can manifest in various ways, from securing funding to establishing business relationships. Women entrepreneurs must continually prove their abilities, which can be mentally and emotionally draining.

Access to Funding and Resources

Securing funding remains a considerable obstacle for women entrepreneurs. Studies have consistently shown that women-led businesses receive significantly less funding compared to their male counterparts. Venture capitalists and investors may subconsciously favor male entrepreneurs, resulting in limited access to capital for women-led startups. This lack of financial support can hinder growth and limit opportunities for innovation.

Work-Life Balance

Balancing the demands of entrepreneurship with personal and family responsibilities is a complex challenge that women often face. The expectation to juggle multiple roles can lead to burnout and affect both business success and personal well-being. Striking a healthy work-life balance is crucial for long-term sustainability and success.

Networking and Mentorship Opportunities

Networking and mentorship are crucial for any entrepreneur’s growth. However, women may find it challenging to access established networks and mentorship opportunities, especially in industries that are traditionally male-dominated. Limited access to mentorship can hinder skill development, industry knowledge, and business expansion.

Lack of Representation

The lack of visible female role models and representation in leadership positions can be discouraging for aspiring women entrepreneurs. Without relatable examples to look up to, women may struggle to envision themselves succeeding in their chosen fields. This absence of representation can undermine their confidence and ambition.

Societal Expectations and Cultural Norms

Cultural norms and societal expectations can play a significant role in the challenges women entrepreneurs face. In some cultures, women are expected to prioritize family over career pursuits, making it difficult to commit to entrepreneurial endeavors fully. Overcoming these norms requires both personal determination and a shift in societal attitudes.

Market Bias and Product/Service Perception

Women entrepreneurs may encounter challenges related to marketing and product/service perception. Some products and services may be perceived as more suitable for women, potentially limiting their market reach. On the other hand, products or services designed for traditionally male-dominated industries could face skepticism or resistance.

Conclusion

Women in India are progressing in all spheres. By utilizing several of the aforementioned government programs and financial perks, it is now about time that women achieved complete financial independence. These programs and efforts support and encourage female entrepreneurs, help women secure their lives, families, and health and eventually help them reach their financial goals.

Due to their tax exemption benefits, most of these programs also enable women to save more money on taxes. Even though India needs to take more critical measures to empower the country’s women, such initiatives prove there is hope for a better tomorrow for women.

Key takeaways

  • TREAD aims to economically empower women by offering them credit, training, development, and counselling support.
  • Working Women Hostels provide a safe and convenient living space for working women and their families.
  • Shakti Kendra offers an interface for rural women to avail of benefits via training and capacity building.
  • Sukanya Samriddhi Yojana (SSY) is a government-sponsored scheme launched to benefit the girl child and ensure a brighter future for her.
  • Stree Shakti provides a personal loan to help women expand their businesses.

Suggested Readings

1. Tax Season is Coming- Know How to Save Tax

2.Budget 2019: Impact on the Common Man in India
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Kotak e-Term

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Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**
Want to Know More?
Invest NOW

Ref. No. KLI/22-23/E-BB/2435

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The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.

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