In recent years, women’s entrepreneurship and economic participation have gained significant importance globally. Women entrepreneurs make invaluable contributions to economic growth, job creation, and social development. However, they continue to face disproportionate challenges in starting and scaling their businesses due to lack of access to finance, networks, and training.
Women’s economic empowerment is essential for gender equality and inclusive growth. In India, initiatives like the Udyogini scheme provide critical support for women entrepreneurs to start and grow their businesses. By facilitating access to affordable credit, the scheme intends to nurture women-led businesses, enhance productivity, create livelihoods and boost financial inclusion.
Understanding the Udyogini scheme
The Udyogini scheme, introduced by the Government of Karnataka in 1997-1998, aims to promote self-employment and entrepreneurship among women through financial assistance. It provides interest subsidies on loans taken by women from institutions like banks, cooperative banks, and regional rural banks for undertaking micro-enterprises across sectors like manufacturing, services, and trade. The scheme was amended in 2004-2005 to further aid women entrepreneurs.
In the absence of formal credit channels, women often resorted to private money lenders charging exorbitant interest rates. The Udyogini scheme was launched to provide women access to affordable credit through regulated financial institutions. It supports a wide range of profitable business activities eligible for funding under the scheme – from bookbinding and garment manufacturing to food processing and embroidery.
The flexible coverage enables women to obtain loans for sectors aligned with their skills and interests. By facilitating access to capital and opportunities for self-employment, the udyogini scheme aims to nurture women-led micro-enterprises and pave the road to financial independence.
The udyogini scheme offers several advantages:
- Access to capital: It enables women to obtain funding to start or expand a business. Loans can be availed from banks and financial institutions.
- Reduced cost of finance: The interest subsidy makes the loans more affordable.
- Flexible coverage: Women can utilise the funds for diverse business activities – from tailoring to food processing.
To avail loans under the scheme, applicants must:
- Be women
- Be aged between 18-55 years
- Be permanent residents of Karnataka
- Have family income below Rs. 1.5 lakhs (general category; there’s no such limit for widowed or disabled women)
- Not have previous defaults on loans with any financial institutions
Preference is given to women who are destitute, widowed, and physically challenged. Women who have previously undergone skill development or vocational training by any KSWDC or other department may also receive priority. 10% of the allocated target is reserved for women of the Swahsakthi or Stree Shakthi groups assisted by the World Bank.
The application process is simple:
- Visit the nearest bank branch with required documents
- Fill out the application form
- Submit documents to the bank for verification
Applicants will need to furnish these documents:
- Three (3) passport-sized photographs
- Training/ Experience certificate of the activity for which the loan is applied
- Detailed project report or DPR of the activity for which the loan is applied
- ID proof like ration card or voter ID card
- Family’s annual income certificate
- SC/ ST applicants would need to provide a caste certificate
- Quotation for capital expenses, including machinery and equipment
By supporting women entrepreneurs, the udyogini scheme enables financial inclusion and women empowerment. It is an impactful scheme that aids women in overcoming challenges in accessing finance. With the right funding and guidance, women entrepreneurs can build successful and sustainable businesses.