Mahila Udyam Nidhi Scheme:
Features, Benefits, Eligibility
and Approved Businesses

The Mahila Udyam Nidhi Scheme was set in motion by the Indian government to encourage more women to take up entrepreneurship. It offers financial assistance and credit facilities at concessional interest rates. If you plan to start a business or expand your existing one, this scheme can provide valuable support for your funding requirements. The funds can be used for a variety of business activities. 

This Mahila Udyam Yojana guide will tell you more about the scheme’s features, benefits, eligibility, and approved business activities. Before delving into the details, let us have a quick overview of the Mahila Udyami Scheme.

What Is the Mahila Udyam Nidhi Yojana?

The Mahila Udyam Nidhi Yojana is an initiative by the Small Industrial Development Bank of India (SIDBI). It was first launched by Punjab National Bank (PNB) under SIDBI’s guidance. Owing to its success and nationwide impact in supporting women entrepreneurs, the scheme has since expanded to other lending and financial institutions. Beneficiaries can avail a loan up to INR 10 lakhs. The funds can be used for projects and businesses engaged in manufacturing, production and service-related activities.

Mahila Udyam Nidhi Loan Features

Some notable features or details of the Mahila Udyami Scheme are listed below:

• Loan Amount: Beneficiaries of this scheme can avail of a loan up to INR 10 lakhs.
• Collateral-Free: Under this scheme, women entrepreneurs are not required to pledge any collateral or security against the loan.
• Interest Rates: Women entrepreneurs are given loans at concessional interest rates. This depends on your credit score, project cost, location and business type. Rates can vary for different lending institutions and other financial institutions.
• Repayment Tenures: This scheme offers flexible repayment tenures of up to 10 years with a provision for extending the loan moratorium for up to 5 years.
• Flexible Usage: These funds can be used for business functions like manufacturing, production and service-related activities. They can also be used to upgrade existing manufacturing facilities and technology
• Loan Limit: The scheme allows you to avail of up to 25% of the total project cost with a maximum amount of INR 2.5 lakhs per project.
• Service Charges: Loans under this scheme charge you a service fee of 1% per annum. This fee can vary or be waived at the discretion of the lending authority.
• Disbursal of Funds: SIDBI sanctions the loan amount, which is disbursed through traditional lending institutions, microfinance institutions, and NBFCs.

Mahila Udyam Nidhi Scheme Eligibility Criteria

The basic requirements for Mahila Udyam Nidhi scheme eligibility are listed below:

• This scheme is only for women entrepreneurs for starting or expanding MSMEs, Tiny Units, and Small-Scale Industries (SSIs).
• Women entrepreneurs must hold a minimum 51% share in the enterprise.
• Businesses in the manufacturing, production, services, or trading sectors are eligible.
• The Mahila Udyam Nidhi Scheme allows using the funds for specific purposes. These include upgrading machinery or technology, diversifying business activities, or setting up new business branches.
• A minimum investment of INR 5 lakhs must have been made in the business.

Project Profile Features

Here are some important project profile features of the Mahila Udyam Nidhi Scheme:

• The project cost must not exceed INR 10 lakhs.
• The loan is limited to 25% of the total project cost, with a maximum amount of INR 2.5 lakhs per project.
• The repayment tenure of the loan is up to 10 years, including a moratorium period of up to 5 years.
• The lending institution charges a service charge of 1% per annum, with a waiver depending on the lending authority.
• Interest rates may vary from time to time.

Approved Business Activities

According to the available information for the Mahila Udyam Nidhi Scheme, here are the approved businesses that may apply for the loan:

• Auto-repairing and servicing centre
• Daycare Centre
• ISD/STD booth
• Laundry and Dry cleaning
• TV repairing
• Canteen and restaurant
• Crèche
• Servicing agricultural and farm equipment
• Tailoring
• Cyber café
• Beauty parlour
• Salon
• Typing centre
• Mobile Repairing
• Washing machine and other electrical appliances
• Photocopying (Xerox) centre
• Purchase of auto-rickshaws, cars, two-wheelers for business
• Cable TV Network
• Road transport operator
• Computerised desktop publishing
• Training institutes

Benefits of Mahila Udyam Nidhi Scheme

Owing to favourable loan terms, there are several Mahila Udyam Nidhi benefits. Longer repayment tenures with a moratorium period ease repayments without making a huge dent in the business cash flow. Loans are often provided without collateral requirements, removing the risk of asset loss and making financial assistance more accessible.

Additionally, the Mahila Udyam Nidhi Scheme helps bridge the gender gap in entrepreneurship. It encourages more women to enter the field of business, aim higher, and expand their enterprises if they already have one. It also promotes the development of MSMEs and SSIs. This also leads to more employment opportunities in the small business sector.

The popularity of the Mahila Udyam Nidhi Scheme is a positive reflection on the entrepreneurial spirit of women and society. 

Tentative Application Process for Mahila Udyam Nidhi Scheme

If you are interested in applying for the scheme, here’s a general overview of the Mahila Udyam Nidhi application process at PNB:

1. Visit the Website

Visit the official PNB website to initiate the application process.

2. Browse Through MSME Schemes

Use the search bar on the homepage and enter ‘Mahila Udyam Nidhi Scheme’. From the list of schemes displayed on the screen, locate the application for MSME loans up to INR 1 Crore.

3. Access the Application Form

You will be redirected to the Mahila Udyam Nidhi Scheme application form page. Download the form and fill it out manually.

4. Fill out the Form

Enter details of the documents for business loans and give your complete contact information. Enter comprehensive information about your business. This includes its nature, partners, credit facilities, proposed machinery and other equipment.

5. Enter Collateral Details

If applicable, enter the details of your collateral security.

6. Give Details of Business Performance

Enter details of your business's past performance and specify future estimations.

7. Specify Statutory Obligations 

Select the appropriate option for statutory obligations.

8. Add Photograph and Signature 

Attach your photograph and your signature to the areas specified in the form.

9. Submit the Form

Review the form thoroughly to ensure you have included all necessary information and attached the required documents. Sign the form and enter the date. You can then visit the nearest PNB branch to submit the form for further processing. 

You can also check with your preferred financial institution if they participate in the Mahila Udyam Nidhi Scheme and their specific application process.

Conclusion

The Mahila Udyam Nidhi Scheme is a significant step towards increasing women's entrepreneurship in India. By providing accessible and affordable loans, the scheme encourages women to take the entrepreneurial leap and contribute to the nation's economic growth. 

If you are looking at finance options to support your business growth, consider SMFG India Credit’s business loans for women. You can apply for collateral-free business loans of up to INR 75 lakhs* with affordable interest rates. Apply online today or contact us for more information.

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