The article discusses Mahila Udyam Nidhi Scheme(MNU) the history of small-scale industries and their elephantine contribution to India’s GDP, and how it gradually demanded a more professional and beneficial system of handling- Udyog Aadhar.
This blog is about the Mahila Udyam Nidhi Scheme, Around the world, from the workforce of the financial sector to the field, ringing strife prevails to achieve gender parity and encourage the holistic advancement and progress of women with their male counterparts. With the growing acknowledgment and fair recognition of women entrepreneurs’ contribution to the nation’s economic growth, there is a need to understand the state of their operations and their ease of accessibility to the means of production in India.
A country-level diagnostic of the demand and supply of finance for women-owned Micro, Small, and Medium Enterprises (MSME) is essential to understand the convenience or available opportunities to set foot into their world of self-owned and regulated finances.
Features of Mahila Udyam Nidhi Scheme
Under the Mahila Udyam Nidhi Scheme, women entrepreneurs can avail of loans up to Rs. 10 lakh to start their businesses or small-scale enterprises. The interest rates offered under this scheme may vary from bank to bank. The funding support can also be used to upgrade or expand existing projects. The maximum loan repayment period offered under this scheme is up to 10 years with the moratorium pages up to 5 years.
Features of Project Profile
- The project cost should not exceed Rs. 10 lakh.
- Deserving women entrepreneurs can avail of a loan limit of up to 25% of the project cost, with a maximum of Rs. 2.5 lakh per project.
- The repayment tenure for the loan is up to 10 years, including a moratorium period of 5 years.
- The interest rates are determined by SIDBI (Small Industries Development Bank of India) and may vary over time. SIDBI communicates the applicable interest rates to women entrepreneurs.
- A service charge of 1% per annum is levied by the respective bank on the sanctioned loan amount.
- The possibility of a service charge waiver depends on the lending office’s policy and discretion.
The Major Highlights of the Mahila Udyami Scheme are:
- Eligibility: Registered Micro MSMEs under the MSME Act are eligible for this loan program.
- Applicable for Micro-enterprises: This loan program is specifically for micro-enterprises involved in services, manufacturing, or production of goods.
- Collateral-free loans: No collateral is required for loans under this government scheme.
- Non-agricultural businesses: Only non-agricultural-based businesses and micro-enterprises are eligible for this loan program.
- Coverage of micro-finance institutions: The scheme also includes micro-finance institutions that provide loans for women or groups of women.
- Joint Liability Group (JLG): JLGs consisting of up to 4 members are eligible to apply for loans under this scheme.
- Self-help Groups (SHGs): SHGs consisting of up to 20 members can avail loans under this scheme.
- Interest rate: The applicable interest rate is determined by individual banks as per the rules set by the Reserve Bank of India (RBI).
Empowering Women Entrepreneurs
Mahila Udyam Nidhi Scheme is a credit scheme launched by the Government of India to empower women entrepreneurs and encourage their participation in the country’s economic development. The scheme provides financial assistance to women entrepreneurs engaged in small-scale industrial units, retail trade, and other service enterprises.
Under the scheme, the government provides financial assistance of up to ₹10 lakhs to women entrepreneurs. The loan can be repaid in 10 years, and the lending agency determines the interest rate. The Small Industries Development Bank of India (SIDBI) implements the scheme through partner lending institutions such as nationalized banks, regional rural banks, and state-level financial institutions.
Activities Included in the Mahila Udyam Nidhi Scheme are as follows
- Auto-repairing and servicing center
- Beauty parlour
- Cable TV network
- Canteen and restaurant
- Computerized desktop publishing
- Crèche
- Cyber café
- Daycare center
- ISD/STD booth
- Laundry and dry cleaning
- Mobile Repairing
- Photocopying (Xerox) center
- Purchase of auto-rickshaws, two-wheelers, cars
- TV repairing
- Road transport operator
- Salon
- Servicing of agricultural and farm equipment
- Tailoring
- Training institute
- Typing center
- Washing machines and other electronic and electrical gadgets, etc.
Udyog Aadhar, What is It?
In the Prime Minister’s words, ‘Some people have suggested that registration for small scale industries should be simple’. The meeting brought up the Udyog Aadhar scheme that would make things better for SMEs and motivate unorganized businesses to get a Udyog Aadhaar Number. MSMEs are engaged in various activities, such as business expansion, improvement, diversification, and technology improvisation.
The Udyog Aadhar Helps Small Businesses
- To gain special preference in procuring Government tenders, the Government of India is interested in buying from Micro and Small businesses through government tenders.
- The Govt. of India and SIDBI have launched a Credit Guarantee Scheme (CGSME) to make available collateral-free credit to SMEs. 1% exemption on the interest rate on Bank Overdraft (OD)
- Protection against delay in payment from buyers. (if payment for purchases from MSME exceeds 45 days, the buyer is liable to pay interest to the SME supplier at three times the bank rate.
- Special 50% discount on Govt. fees for Trademark & Patent
- Enterprises with MSME certificates can provide a 50% subsidy for patent & trademark registration.
- Concession in electricity bills
- Multiple tax rebates (income tax and capital gain tax subsidies) are enjoyed.
- Quickly resolving disputes, the MSME Facilitation Council for Conciliation and Arbitration can be referred to in case of payment disputes.
Udyam Sakhi
The Ministry of Micro, Small & Medium Enterprises, popularly known as the engine of growth in the country and patron of self-reliance and entrepreneurship has emerged as the chieftain of women empowerment globally.
On the eve of International Women’s Day in 2018, the Ministry of MSME launched Udyam Sakhi also called Mahila Udyam Nidhi Scheme, a network for nurturing women surveyed to be less likely to manage business finances independently, often due to the absence of adequate supplies management practices and opportunities available, as compared to men. Hence, the business model mostly included affordable assistance/ services and economical products.
Mahila Udyam Nidhi Scheme (MUN)
The hallmark characteristics of women-owned businesses, urban or village-centric, and their need for financial and non-financial services were nuanced. The uptake of financial products and the barriers to their access were analysed especially experienced by women. This birthed the Mahila Udyam Nidhi Scheme: https://nsfdc.nic.in/en/udyam-nidhi-yojana. Additionally, key areas of focus have been identified of late that will help improve women entrepreneurs’ access to finances.
Purpose of Mahila Udyam Nidhi
Mahila Udyam Nidhi scheme aims to assist women entrepreneurs in meeting the equity fund requirements while establishing a new business.
About This Novel Scheme
Mahila Udyam Nidhi (MUN) Scheme is a scheme offered by the Small Industrial Development Bank of India (SIDBI). The primary motto of the scheme is to encourage, enable, educate, and empower women entrepreneurs and promote women entrepreneurship by providing financial assistance. Accessibility to financial aid is made even more attractive by offering special rebated rates of interest on loan money.
Under the Mahila Udyam Nidhi Scheme, women entrepreneurs can provide loans to upgrade, expand, and invest in existing projects or multiple new businesses. Punjab National Bank was the first to launch the Mahila Udyam Nidhi Scheme to provide support funding to women entrepreneurs engaged in SSIs.
Application Form for Mahila Udyam Nidhi Scheme
- Visit the official website of Punjab National Bank (PNB)
- Enter “Mahila Udyam Nidhi Yojana” in the search box on the homepage and click search
- A list of schemes will appear on the screen with application forms
- Scroll down to find the MSME loan application form and select the option for up to 1 crore.
- You will be redirected to the Mahila Udyam Nidhi application form, which you can download and print
- The first page of the form is the Provisional Acknowledgement, followed by the application form starting from the second page.
- Fill in the required details, including applicant and business information, contact details, firm details, collateral security details, past performance, statutory obligations, address and ID proof, photograph, and signature.
- Complete the form with your signature, date, and place.
- Submit the completed form to the nearest PNB branch for the verification process.
Eligibility Criteria for the Mahila Udyam Nidhi Scheme
- Women entrepreneurs who have existing and begun new MSMEs, Tiny Units, or SSIs
- The financial holding of women entrepreneurs cannot be less than 51%, engaged in manufacturing and production purposes
- Loans are offered for existing or new MSMEs engaged in services sectors, trading, and manufacturing sectors
- MSMEs or tiny enterprises with a minimum investment of at least Rs. 5 lakhs
There are plenty of activities included in the Mahila Udyam Nidhi Scheme. Below are named a few:
- Repairing and servicing centre
- Salons/ Beauty parlors
- Cable TV Network
- Canteen and Restaurant
- Computerised Desktop publishing
- Crèche
- Cyber Café
- Day-care centre
- ISD / STD Booth
- Laundry & Dry Cleaning
Benefits of Mahila Udyog Nidhi Scheme
- Encourages women entrepreneurship
- Enhances job opportunities in micro and small-scale industries
- Bridges the equity gap
- Revives struggling small-scale industries
- Facilitates growth, modernization, and technological advancement in service sectors
Interest Rate of Mahila Udyam Nidhi Scheme
Women entrepreneurs in India can avail loans from all banks at concessional interest rates, typically ranging from 7.35% to 7.60%. However, for the Mahila Udyam Nidhi Scheme, the interest rate may vary depending on the project cost. It is important to note that a service charge of 1% per year is also applicable on the loan amount provided by the banks.
Why Are These Mahila Udyam Nidhi Scheme Necessary?
Women collectively contribute 3.09 percent of industrial output and employ 10 percent of the total workers engaged in different economic activities in India. Still, India ranks third-highest in the entrepreneurship gender gap across the world. A mere 33 percent of the early-stage entrepreneurs in India are women.
When explored and discussed, it was found that most women entrepreneurs said that they wanted non-financial services, such as
- Support and training in accountancy
- Financial planning
There is a firm need to overcome individual systemic biases that perceive women-owned small businesses as risky. Real problems such as women’s lack of access to movable and immovable property as collateral are big impediments and should be combatted and removed.
- Most banks often use default rates or traditional credit scoring models – relying on credit history and collateral – to assess creditworthiness poses major challenges for many women who simply do not have access to collateral or adequate credit history.
- Difficulty in establishing the creditworthiness of women-owned businesses – around 80 percent of banks identify challenges in this area.
- Only 17 percent of women entrepreneurs were aware of financial schemes (Mahila Udyam Nidhi Scheme) launched by the government or financial institutions.
- Entrepreneurs indicate the need to streamline and ease loan application procedures.
- The financing conditions for women owning small businesses are challenging – they are likely to face higher borrowing costs. They may be required to provide collateral for a higher share of their loans than their male counterparts.
- Women mostly get shorter-term loans.
- Numerous surveys show that the rejection rate of loan applications from women entrepreneurs is higher in the developing world. India is one.
Conclusion
It is estimated that nearly 90 percent of women entrepreneurs have not availed of finances from formal Financial Institutions. Of the estimated 11.4 million women-owned MSMEs in India, formal financial institutions serve only 10 percent.
Those who haven’t availed of formal finance assistance are the ones:
- who sought credit from FIs but had their applications rejected,
- who never applied as they felt they could not meet the collateral requirements,
- Those who never applied for other reasons, including lack of awareness about loan products and application procedures, risk aversion, unfavorable credit terms, or complicated application forms.
There is no chance for the world’s welfare unless the condition of women is improved. A bird can’t fly on only one wing. Leaving one-half of the population behind is a grave and unforgivable faltering step on the country’s part and its indented economy. The Ministry of MSME Registration has emerged as the premier institution responding to the phenomenon of female entrepreneurship, which intends to celebrate women who are breaking the regressive restraints that society and circumstances have placed on them and are choosing to be financially independent.
FAQ’s on Mahila Udyam Nidhi Scheme
What is Mahila Udyam Nidhi scheme?
The Mahila Udyam Nidhi scheme is a special loan scheme launched by the Government of India to provide financial assistance to women entrepreneurs who want to start or expand their businesses.
Which bank introduced Mahila Udyam Nidhi?
The Mahila Udyam Nidhi scheme was introduced by the Small Industries Development Bank of India (SIDBI) in collaboration with various banks across India.
What is the Mahila Udyam Nidhi scheme interest rate?
The interest rate for the Mahila Udyam Nidhi scheme may vary depending on the lending institution and the loan amount. However, the interest rate is usually competitive and affordable for women entrepreneurs.
What is Mahila Udyami Yojana English?
Mahila Udyami Yojana is the Hindi translation of the Mahila Udyam Nidhi scheme. It is known as the 'Women Enterprise Fund Scheme' in English.
Who is eligible for Udyogini scheme?
The Udyogini scheme is another loan scheme the Government of India introduced to provide financial assistance to women entrepreneurs. Eligible candidates for the Udyogini scheme are women who have completed 18 years and have passed at least the eighth standard exam. Women who are engaged in small business or artisan activities and registered with the District Industries Center (DIC) are also eligible for the Udyogini scheme.
Who implemented the Mahila Udyam Nidhi Scheme?
The Mahila Udyam Nidhi Scheme is implemented by various financial institutions and banks in India.
When was the Mahila Udyam Nidhi Scheme launched?
The specific launch date of the Mahila Udyam Nidhi Scheme may vary, but it has been in operation for several years to support women entrepreneurs.
Which banks offer the Mahila Udyam Nidhi Yojana?
Several banks and financial institutions in India offer the Mahila Udyam Nidhi Scheme. The availability and terms of the scheme may vary from one bank to another.
Who started the Mahila Nidhi scheme?
The Mahila Udyam Nidhi Scheme was introduced by the Government of India to promote women entrepreneurship and provide financial support to women entrepreneurs. The specific entity or department responsible for starting the scheme is the Ministry of Micro, Small, and Medium Enterprises (MSME).
