We are on our way to becoming a progressive society in which women are equal to men in every way. Today’s women are more career-oriented, capable, and intelligent. However, in comparison to other countries, India’s growth in the number of female entrepreneurs has been slow.
Many Indian women are preoccupied with running their households, while others face challenges when they try to work outside the home. For instance, for women who aspire to be entrepreneurs, sometimes even finalizing a business idea or seeking a loan for women becomes a challenge.
Here are some of the challenges that are faced by Women Entrepreneurs in India:
- The financing conditions for women-owned small businesses are challenging due to gender disparity, cultural barriers and bias. Women are likely to face higher borrowing costs, and they may be required to provide collateral for a higher share of their loans than their male counterparts.
- Many surveys show that the rejection rate of loan applications from women entrepreneurs is higher in the developing world.
- There is a need to streamline and ease loan application procedures for women. The average turnaround time in availing of loans for women is usually 41 days. (source – IFC, Financial Inclusion for Women-owned MSMEs)
Business Loans for Women: Here are some options
1.Working Capital Loans (Manufacturing, Service, Trading):
A working capital loan is a form of financing that covers a company’s day-to-day operating costs. Instead of long-term investments or properties, the company may use the loan to fund short-term operating needs. You can fund the following operations/services through a working capital loan.
- Raw Materials/Stock Purchase
- Business Premises Renovation
- Supplier Payments/General Business Expenses
- Product/Market Expansion
- Machine Repair
Who is this loan for?
Micro, small and medium enterprises (MSMEs), especially small businesses that are cyclical or seasonal, may benefit from working capital loans. Seasonal companies need funding during the off-season to plan and sell vigorously at the right time since they make most of the money during the peak season. Therefore, they need cash flow across the year if they are to stay afloat.
2.Asset Purchase Loans (Manufacturing):
If you want to invest in new or used machinery for your business, asset finance can help make it more accessible. Asset purchase loan is a type of business finance that enables you to confidently get the business assets you need to grow and operate efficiently.
You can take an asset purchase loan for the following:
- New Machine Purchase
- Second-hand Machine Purchase
3. HerVikas
HerVikas is a loan program for women entrepreneurs, offered by Kinara Capital, to help them grow their businesses.
- Upfront discount available for women-owned MSMEs
- Automatic discount of up to 1% for Women Proprietors
- No extra documentation required
- All loan types eligible for HerVikas discount
Have a look at what Shyamala from VV Creations has to say about her experience with Kinara Capital.
“With timely loans from Kinara, we were able to expand our business. We now employ over 50 workers. Women should be courageous and follow their dreams. I started as a helper; now I am a proud business owner and HerVikas customer.”
Get A Business Loan for Women In 4 Easy Steps:
Step 1: Eligibility Check
Step 2: KYC Verification – Personal and Business
Step 3: Income Verification
Step 4: Loan Application and Approval
Entrepreneurship is a developmental tool for socio-economic growth. Women entrepreneurs increase the number of women in the workforce, set an example in the community and break cultural barriers.
However, obtaining credit to grow a business still remains a challenge. Banks usually have an extensive application process and demand collateral. These issues leave an entrepreneur with no choice but to approach informal lenders.
Non-banking Finance Companies (NBFCs) in India fill the credit gap left by Indian banks. Reputed non-banking financial institutions like Kinara Capital help and complement the banking sector’s efforts to improve financial inclusion. They have funded thousands of MSMEs across India. They have more than 100 branches across Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Telangana and UT Puducherry.