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December 29, 2022

How do Business Loans for Women Help Women-owned MSMEs Shine?

    • December 29, 2022
    • By Team Kinara
    • < 1 mins read

    MSME Loan

    Did you know that women entrepreneurs contribute considerably to the Indian economy? Yes, you read it right! There are around 3 million business firms in the country that are into Micro, Small, and Medium Enterprises (MSMEs) with full or partial female ownership. According to government statistics, the number of women-owned SMEs expanded dramatically by more than 75% in the financial year (FY) 2022, rising from 4.9 lakh units in the previous financial year to 8.59 lakh units.

    Women entrepreneurs have broken through numerous hurdles in the last few years, including access to funds at the required time. However, MSME women entrepreneurs still have a lot to learn and experience. International Finance Corporation reports that women own only 20% of MSMEs. Of those, 98% remain in the micro category rather than growing to become Small and Medium Enterprises. Women-owned enterprises collectively contribute 3.09 per cent of industrial output. They employ over 8 million people, and approximately 78% of women-owned enterprises belong to the services sector.

    As with the broader MSME sector, access to formal finance is a key barrier to the growth of women-owned businesses, leading to over 90 per cent of financial requirements being met through informal sources. Seeing the same, several Non-banking Financial Companies (NBFCs) like Kinara Capital are offering special business loans to women designed specially to meet the business-related demands of women-owned businesses.

    What is HerVikas Program?

    To empower MSME women-owned businesses, Kinara Capital, a leading last-mile lending firm in India, has designed a special program called HerVikas. Through this scheme, Women MSME business owners engaged in the manufacturing, trading and services sector can avail of a 1% discount upfront to scale up their businesses with no additional documentation required.

    HerVikas program offers several benefits to MSME women entrepreneurs, including flexible loan amounts, an upfront discount, and a faster loan process. Let’s take a look at some of them below.

    Benefits of HerVikas Business Loans for Women from Kinara Capital:

    1. No Need for Collateral

    Most women small business owners in India don’t have assets in their name. This makes it difficult for them to acquire formal credit. Kinara’s HerVikas program helps them get sufficient funds without submitting any property collateral. With Kinara’s HerVikas program, women borrowers can receive financial support and more flexibility in handling their business operations without the need for leveraging any assets.

    2. Minimal Documentation

    Kinara doesn’t require extensive documentation to provide loans for women-owned MSMEs. Minimal documentation helps women entrepreneurs get easy online loan approval. Hence, they can focus on optimum capital utilisation to fulfil their business goals without going through the process of visiting the lender’s office or branch, or the time-consuming documentation procedures.

    3. Sizable Sanction up to ₹30 Lakhs

    Kinara Capital provides HerVikas Business Loans from ₹1 Lakh to ₹30 Lakhs to Registered women-owned MSMEs from Karnataka, Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Telangana and UT Puducherry.

    4. Hassle-free, Online Application Provision

    Women-owned MSMEs can easily get HerVikas Business Loans online through Kinara Capital's myKinara App. It will let them experience a quick and convenient method of acquiring a collateral-free Business Loan with easy approval. They will have the entire sanctioned amount disbursed in their mentioned bank account within 24-hours.

    5. Doorstep Customer Service

    All customers of Kinara can get doorstep customer services in their preferred vernacular language to make an easy loan application process.

    A timely business loan can instantly expand the marketing potential, speed up operations, and increase the profit margins of women-owned MSMEs. Here is a quick guide on how to apply for a business loan for women.

    Grow your MSME with collateral-free business loans

    Business Loan Schemes for Women Entrepreneurs

    There are various business loan schemes for women in India. Some of these are the following:

    Schemes by Banks

    Some banks offer business loans for women individually, and some collaborate with the government. They provide financial assistance to women-owned startups and existing companies to grow their businesses. A few of these schemes are:

    • The Central Bank of India’s Cent Kalyani
    • Bhartiya Mahila Bank’s (SBI) Shringaar and Annapurna Loan Schemes
    • Canara Bank’s Synd Mahila Shakti
    • Bank of Baroda’s (BOB) Shakti Scheme

    Schemes by the Government

    The government also supports women entrepreneurs in starting new businesses and expanding existing ones. These schemes offer low-interest rates for women. Some of these schemes that are worth mentioning include:

    • Annapurna Scheme
    • Mudra Yojana Scheme
    • Pradhan Mantri Rozgar Yojana
    • Udyogini Scheme
    • Mahila Udyam Nidhi Scheme

    Challenges Faced by Women-owned MSMEs, and How Kinara Supports their Growth

    Business Loans for women are essential for women-owned MSMEs to get faster access to funds, which is one of their biggest obstacles. Despite possessing superior skills for the business and the potential for running a successful enterprise, women are often discouraged by the lack of funding. Women, particularly in rural areas, have a difficult path to traverse when they begin their entrepreneurial journeys. They may not be able to get formal credit as they don’t have documents in their own name or due to other stringent loan application procedures from banks. Hence, they turn to NBFCs and apply for collateral-free business loans.

    Unsecured Business loans are a great solution for small business entrepreneurs to access the capital they need quickly. But unfortunately, in this regard, too, MSME women entrepreneurs face a disproportionate amount of difficulty. According to a report from International Finance Corporation, nearly 90% of women entrepreneurs have not availed of formal credit from financial institutions like banks. This presents an additional hurdle for women, who already struggle to break through socio-economic barriers to enter a male-dominated area like entrepreneurship. The way to cut through these issues would be to make business loans easily accessible to women entrepreneurs.

    NBFCs like Kinara Capital have filled this gap in the market by coming up with specific solutions for women. Kinara’s HerVikas business loan takes away the main debacle for women since they often don’t own assets that can be leveraged as collateral. Kinara makes it easy for women-owned businesses to get a business loan as they realise that seeking loans for women entrepreneurs presents several social barriers and biases.

    MSMEs

    How Do I Apply for a Business Loan for Women from Kinara Capital?

    Women MSME entrepreneurs can start the application process for HerVikas business loans for women online with a 1-minute eligibility check on Kinara’s official website or by downloading the myKinara App. Women MSME entrepreneurs can then take the application forward by uploading the documents. Alternatively, a Kinara loan officer will contact them as soon as possible to finish the rest of the requirements in their preferred vernacular language.

    Eligibility Criteria for Kinara's Business Loan for Women

    The eligibility criteria for HerVikas business loans for women are no different than those for other loans issued by Kinara, other than the requirement that they are fully or partially owned and run by a woman entrepreneur. The following are the criteria MSMEs need to meet to be eligible:

    • The MSME business must operate in the trading, manufacturing, or services sector.
    • The MSME business must be in operation for 2+ years when they apply for the business loan.
    • The total monthly turnover of the MSME should be greater than Rs. 50,000 and less than Rs. 2 crores.
    • The MSME business should be a sole proprietorship, partnership or private limited company.
    • Both an applicant and a co-applicant are needed to apply for a loan.

    Documents Necessary for a Business Loan for Women

    Kinara requires minimal documentation or paperwork to issue collateral-free business loans to women entrepreneurs. Therefore, it makes the application process smooth and easy for women entrepreneurs. Some of the documents required to obtain HerVikas business loans for women entrepreneurs are mentioned below.

    • Applicant’s KYC document (PAN card)
    • Co-applicants KYC document (PAN and Aadhaar are recommended but not mandatory)
    • Business KYC document (Udyam registration, etc.)
    • Last 12 months’ bank statements
    • GST and ITR documents are optional

    Conclusion

    Women entrepreneurs are the driving force behind many small businesses in India, but they remain a marginal section of the economy. Women are often overlooked in the business world because of stereotypes about them being less capable than men. They can also face challenges when trying to get loans from banks and other financial institutions because they are perceived to have less experience dealing with money and finance than men do.

    However, for MSMEs looking for quick funding to establish or grow their business without resorting to unscrupulous lenders, a small business loan from a trusted NBFC like Kinara Capital could be just what they need! Business loans for women can be used for various purposes, including purchasing inventory and equipment, paying wages, managing cash flow, etc. It is an ideal option for women business owners who need help raising capital for projects like expansion or acquisitions.

    Kinara Capital is a women-led fintech company encouraging women’s empowerment and providing easier access to capital for small entrepreneurs across India. Kinara is one of the trustworthy lending platforms in India that provides unsecured business loans to women-owned MSMEs. MSME owners can avail of fast and flexible loans from ₹1 lakh to ₹30 lakhs available within 24-hours from this RBI Registered Systemically Important NBFC in India. With its mobile-first approach, the company has made its myKinara App available in vernacular languages. Any registered MSMEs from manufacturing, trading and services sectors that need funding for their growth can opt for unsecured or collateral-free business loans from Kinara Capital. Give a missed call to 080-68264454 and get contacted by Kinara’s customer support team for all the answers. MSMEs can also reach them at the toll-free number 18001032683, from Monday to Friday, 9.30 am to 6.00 pm.

    FAQs

    1. Is it easy for women entrepreneurs to get a Business Loan from Kinara Capital?

    Yes, women entrepreneurs can get a big-ticket loan conveniently if you fulfil the eligibility criteria. You can start the 1-minute eligibility check in the myKinara App to determine the business loan eligibility. After that, you can fill in the application form and submit the necessary documents. Once approved, you can get an unsecured business loan for women of up to Rs. 30 lakhs within 24-hours.

    2. Do I have to provide security to avail of a business loan for women entrepreneurs from Kinara Capital?

    No, if you are a women entrepreneur from the manufacturing, trading, and services sectors, you can avail of the HerVikas loan without pledging any property collateral.

    3. What are the steps to apply for Kinara’s business loan for women?

    • You can start the application process online on Kinara’s official website or by downloading the myKinara app, with a 1-minute eligibility check.
    • Once you clear the eligibility check, you can fill in the application form on the myKinara app or Kinara’s official website.
    • The next step is uploading the documents. You can also submit the documents offline. A Kinara loan officer can contact you to complete the rest of the requirements in your preferred vernacular language.
    • Once approved, you can wait for the fund to be disbursed into your mentioned bank accounts within 24-hours.

    4. What are the requirements to get HerVikas business loan from Kinara?

    You can get a HerVikas business loan if your business fulfils the business loan eligibility criteria with a monthly turnover between Rs. 50,000 and Rs. 2 crores. Your business should be part of the trading, manufacturing, or services sector. If you are into manufacturing businesses, it should be 1+ years old, and if you are from businesses in trading or services should be 2+ years old.

    5. Do I need to visit Kinara's Branch to take HerVikas Business Loan?

    No, you don’t need to visit any branches to apply for a HerVikas loan. The process can be carried out online. If you need any support in the loan application process, Kinara’s Field Officer will visit you at your place of business to provide information and help you with the loan application process.

    Check your eligibility in just 1-minute!

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    Written by
    Team Kinara
    • Tags
    • Business Loans for Women
    • loans for women
    • women entrepreneurs
    • women-owned businesses
    • collateral-free business loans
    • HerVikas business loans

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