Udyogini Yojana: Empowering Women Entrepreneurs

Women are the backbone of the Indian economy. According to the latest World Bank data, they constitute 48.4% of the total population of the country. Presently, there are over 8 million women entrepreneurs in India, and 20% of the micro, small, and medium enterprises (MSMEs) are women-led. Thus, empowering women is key to achieving sustainable and inclusive economic development.

The government of India has introduced many schemes to foster entrepreneurship and ensure the welfare of women. One such initiative is the Udyogini Yojana Scheme, which provides financial support to budding female entrepreneurs from rural and underdeveloped regions of the country.

Read this blog post for deeper insights into the scheme.

What is the Udyogini Scheme?

Udyogini Yojana is a unique scheme offered by banks and non-banking financial companies (NBFCs) under the direction of the central government. It helps women, especially those from lower-income groups, to obtain loans of up to ₹3,00,000 at affordable rates to start, grow, and run their businesses.

Udyogini Scheme Details

The key features of the Udyogini Scheme are:

1. 1. Provides business loans at lower interest rates: The scheme offers financial assistance to general-category women at favorable rates between 10% and 12%, depending on the terms and conditions of the lending institution. For women in special categories, such as widows, disabled, and destitute, Udyogini Yojana provides interest-free loans. Moreover, no family income limits are prescribed for these women.

2. 2. Covers many small-scale industries (SSIs): The scheme supports 88 small-scale business categories. The list includes enterprises such as tailoring, creches, bakeries, flour mills, and fish stalls.

3. 3. Offers loan subsidies: Under this scheme, beneficiaries can receive subsidies of up to 30% of the loan amount based on the annual income of their families. Women belonging to the Scheduled Caste or Scheduled Tribe categories are entitled to higher subsidies of up to 50% of the loan amount if their family income is below ₹2,00,000 per year.

4. 4. Imparts skill development training: Udyogini Yojana provides upskilling programs for women, like EDP training. They also receive the necessary guidance to hone their functional skills, like business planning, pricing, marketing, etc., to be self-employed.

Udyogini Scheme Eligibility

You can qualify for Udyogini loans if you meet the following eligibility criteria:

• You are a woman business owner aged between 18 and 55 years

• Your annual family income is below ₹1,50,000

• Your credit score is high

• You have not defaulted on your past loans

• You have submitted the required documents along with the filled-in application form:

  • Two passport-size photographs

  • Aadhar card

  • Birth Certificate

  • Below Poverty Line Card, along with a copy of the ration card, if applicable

  • Caste certificate

  • Address Proof

  • Income verification letter

  • Bank account passbook

  • Any other document required by the bank or NBFC

How does the Udyogini Scheme benefit Entrepreneurship?

In the past, the lack of a structured credit system often prompted women to borrow money from private lenders at high-interest rates. Underprivileged women from the hinterlands or villages of the country hardly had any means of livelihood and were dependent on men for financial stability.

The prime goal of the Udyogini Scheme is to financially empower women and make them self-reliant by providing easy access to credit. It encourages them to set up their ventures and start earning. Overall, it nurtures the development of the MSME sector.

Bottom Line

While the Udyogini Yojana scheme is a boon for women entrepreneurs, collateral-backed MSME loans can provide them with additional funds to expand their businesses, meet working capital needs, and manage operational expenses.

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