Image Source : PTI Budget 2025: Loan scheme for 5 lakh SC, ST first-time entrepreneurs
In a recent announcement by Finance Minister Nirmala Sitharaman on Saturday, the government revealed its budget plan for 2025-26, and it includes a significant initiative to encourage SC/ST first-time women entrepreneurs.
“A scheme will be launched for 5 lakh women SC/ST first-time entrepreneurs. This will provide term loans up to Rs 2 crore during the next five years. The scheme will incorporate lessons from the successful Standup India scheme,” says Finance Minister Nirmala Sitharaman.
How this scheme will benefit women entrepreneurs?
India continues to rank low in the Global Gender Gap Report, despite a minor improvement in the gender parity ratio, according to the World Economic Forum. The gap between women’s equality in various fields is being widened by economic status.
Approximately 90% of Indian women entrepreneurs have never taken out a loan from a formal financial institution, according to a 2022 IFC report. Compared to 53% of businesses run by men, 72% of female-led businesses had no cash reserves during the 2020 lockout. In India, women are only given credit equal to 27% of the deposits they make, whilst men are given credit equal to 52%. One possible explanation for this discrepancy is that women are not given equal credit by financial organizations.
Limited access to professional networks presents another difficulty for female entrepreneurs. According to a Google-Bain poll, 49% of participants said they did not receive enough professional support since they were not included in both formal and informal networks.
Women have additional pressures from society in addition to financial constraints. They are frequently expected to succeed in their professional careers while juggling obligations at home. Their productivity and company expansion are impacted by this combined burden.
Existing support options for women
Mudra Yojana: Provides loans up to Rs 10 lakh with no collateral, and women receive lower interest rates.
Stand-Up India Scheme: Gives at least one SC/ST borrower and one woman per bank branch bank loans ranging from Rs 10 lakh to Rs 1 crore for the establishment of a greenfield business. A SC/ST or female entrepreneur must possess at least 51% of non-individual businesses.
Prime Minister’s Employment Generation Programme (PMEGP): Encourages women to work for themselves by providing funding for new micro businesses and small enterprises.
Udyam Shakti Portal: This program, which was started by the Ministry of MSME, encourages social entrepreneurship by offering mentorship, training programs, incubation facilities, company planning support, and market research. Up to Rs 25 lakh can be spent on projects, with Rs 10 lakh going to service-based businesses.
Economic Empowerment of Women Enterprises and Start-ups by Women: A program run by the Ministry of Skill Development and Entrepreneurship that provides female micro-entrepreneurs with acceleration and incubation support. At the moment, it operates in Telangana, Rajasthan, and Assam.
