Page 51 - Banking Finance October 017

FEATURES

SPECIAL LOANS

FOR WOMEN

ENTREPRENEURS

T o woo women entrepreneurs, financial institutions eligible to get this special product. For example, Union Bank

of India requires the business to be owned and managed by
often offer special products. One such product is
women. In case of partnership, a majority of the partners
the special business loan for women offered by
some public sector banks. State Bank of India’s
(SBI)’s Stree Shakti Package and Central Bank of India’s Cent- should be women. Similarly, in order to avail loan under SBI’s
Stree Shakti Package, more than 50 per cent of the share
Kalyani are among the few available in the market. capital should be held by women. In the case of a special
loan, providing a margin or a security as collateral is
Cost savings, the attraction mandatory, but with some relaxations.
Getting this special category loan can save money for
women entrepreneurs. The major cost saving will come in Some banks like SBI do not require any security for loans up
the form of a concession offered on the interest rate front. to Rs. 5 lakh. But others require a margin amount as
The interest rate is lower by 0.25 to 1 percentage point collateral or security for getting the loan. For instance,
when compared to the general business loans offered by Tamilnad Mercantile Bank needs 20 per cent margin for
loans above Rs. 25,000. The margin requirement in the case
these institutions.
of Union Bank of India is 5 per cent for loans up to Rs. 10
For instance, Oriental Bank of Commerce charges 10.7 per lakh and 15 per cent for loans above Rs. 10 lakh. The
cent interest rate to women entrepreneurs under the Small company’s assets can be hypothecated in these cases as a
and Medium Enterprise scheme for loans above Rs. 2 lakh security for getting the loan.
and up to Rs. 25 lakh. This interest rate charged is 1.25
According to experts, there is low level of awareness in the
percentage points less than the 11.95 per cent charged for
market about this special product for women. Vikas Kumar, Co-
a normal loan. Similarly, SBI offers 0.5 percentage point
lower interest rate under its Stree Shakthi Package for loans founder, Loantap, says that banks do not market them much
above Rs. 2 lakh. Other cost savings come in the form of and do not offer them unless explicitly asked for. Secondly, no
processing fee waiver as in the case of Union Bank of India’s private bank or non-banking financial company (NBFC) offers
Union Nari Shakti scheme. similar products. “If business loan for women is classified as a
priority sector, then the private institutions may be forced to
On the other hand, some banks, like Central Bank of India, offer them and also push such products,” adds Vikas.
levy a processing fee of Rs. 250 per lakh if the loan amount
exceeds Rs. 5 lakh. In normal cases, banks charge 0.5 per Other options
cent of the loan amount as the processing fee, immaterial In some cases, these special loans may not be available.
of the quantum of loan taken.
“Taking a business loan would become difficult if the business
is less than three years old,” says Rishi Mehra, CEO,
Eligibility and collateral Wishfin.com. “In such cases, one can consider taking a loan
Businesses run by women should meet certain criteria to be against property or loan against gold.” (Source : Business Line)

50 | 2017 | OCTOBER | BANKING FINANCE

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