Udyogini Scheme for Indian Women Entrepreneurs

Overview

Women entrepreneurs in India have successfully tapped into lesser-explored sectors in the last few years, which include food, travel, beauty, textiles, etc. To promote financial independence among the enlarging women workforce the Government of India launched the Udyogini Scheme in 2020 under the Women Development Corporation. It is an innovative initiative that ensures economic self-reliance with business loans for women and motivates budding female entrepreneurs belonging to rural and backward areas by providing lucrative financial assistance.

The primary aim of the Udyogini yojana is to facilitate easy credit availability for business loans for women without any bias or discrimination. It helps them avoid borrowing money at high business loan interest rates from private borrowers in the unstructured lending system.

Hence, if you are a woman worker, you can avail of an affordable and liberal business loan under this scheme and establish micro businesses to remain self-employed and even contribute to the overall growth of the economy.

Latest News and Updates On Udyogini Yojana

• Change in rule in the disbursement of financial assistance under the Udyogini Scheme

In a bid to empower women with business loans for women and promote their growth in various industrial sectors, the Udyogini Scheme has introduced a new set of instructions for sanctioning financial aid. The updated guidelines require banks to adhere to the prescribed loan for business disbursement norms based on the category of women beneficiaries.

In the case of General Category women, the bank shall disburse around 20% of the plan expenditure or a maximum of Rs. 7,500, whichever is less. Whereas for women who fall under a Special Category, including SC, ST, widows, the physically challenged, and destitute, among others, about 30% of the planned expenditure or a maximum of Rs. 10,000, whichever is less, shall be disbursed.

Banks will have to ensure that the entire sanctioned business loan amount is disbursed to the beneficiary directly. The financial assistance will be treated as a ‘Backend Subsidy’. Also, the guidelines entail that to facilitate easy repayment options for the women beneficiaries, banks shall recover the working capital loan in 36 monthly instalments.

• Udyogini Scheme mandates compulsory Entrepreneurship Development Programme (EDP) training

Business loans for women equip the entrepreneurs with essential skills to help them in managing their business ventures successfully, the authorities now mandate qualified applicants under the Udyogini Scheme to undergo a 3-day comprehensive business improvement training under the Entrepreneurship Development Programme (EDP).

This programme is primarily sponsored by a bank and covers all crucial aspects such as record-keeping, money management, business development, and marketing to instil entrepreneurial abilities among the beneficiaries. Furthermore, in the state of Karnataka, to offer comprehensive financial coverage for the training, the government will provide financial support of Rs. 520 per day for residential training and Rs. 450 per day for non-residential training.

There will also be a complete assessment of the training received under the EDP programme. The Deputy Director or Assistant Director will conduct examinations to assess the understanding of the training material among the participants. Disbursement of business loans online will only occur after the successful completion of the training.

• The great success of the Udyogini Scheme in Karnataka

While the Udyogini Scheme has played a pivotal role in promoting economic stability and incoming generating activities for women across India, it has made significant development in Karnataka. The numbers over the years reflect the initiative’s impact on fostering independent livelihoods with business loans for women from various backgrounds since its inception in the year 2009-10.

Notably, during the year 2011-12, there was an impressive surge in beneficiaries, with 15,518 women benefitting from the scheme. However, there was a dip in the number of beneficiaries in 2013-14, with only 2,630 women availing of the benefits. Following this, the scheme rebounded remarkably, empowering 9,057 women during the year 2015-16.

In 2023, the Udyogini Yojana continues to support business loans for women from diverse backgrounds, including those facing challenging circumstances such as abandonment by husbands and physical disabilities. By providing a platform for income-generating activities in Karnataka and all over India, the scheme remains a crucial instrument in promoting inclusivity and economic progress for women throughout the country,

Why Avail of the Udyogini Scheme?

The Indian Government under the scheme has directed financial institutions, including banks and NBFCs, to provide an interest-free affordable business loan to women belonging to different sections of society without any preference or prejudice related to caste. While primarily launched by the Karnataka State Women’s Development Corporation (KSWDC), Punjab and Sind Bank, Saraswat Bank, Regional Rural Banks, and Cooperative Banks, these days you can avail of an Udyogini business loan through many government and private banks and NBFCs as well.

Here are some of the key objectives and features of the Udyogini yojana.

Objectives of the Udyogini Scheme

The primary objectives of Udyogini Yojana 2023 include the following:

• Motivate women specifically in the backward and rural areas to avail of a loan for business from structured channels, such as banks and NBFCs, for engaging in economically beneficial activities.
• Prevent the women workforce from relying on private money lenders for business loans online that come with high business loan interest rates.
• Offer zero-interest loans for business to eligible women to augment entrepreneurship abilities.
• Provide financial assistance to women belonging to lower castes, SC, and ST by offering low interest rate for business loans.
• Make financial assistance more affordable for women who fall under the SC, ST or other special categories.
• Facilitate diverse skill development courses to enhance business understanding among women.

Features of the Udyogini Scheme

The Udyogini initiative aims to remove all the financial hurdles faced by women who wish to develop an independent lifestyle by setting up their businesses. This is especially applicable to impoverished women who belong to the lower classes of society. To provide maximum support, the Udyogini scheme offers several features and advantages that make it unique.

High Loan Amount Value

Beneficiaries under the Udyogini Scheme can avail of the business loan amount of Rs. 3 lakhs. However, the applicants must mandatorily meet the required eligibility criteria to secure this sum. You can also check out the business loan options from FlexiLoans. They ensure high online business loan amounts, starting from Rs. 50,000, to adequately cater to the heavy financing needs of businesses from time to time.

Upto 30% Subsidy on Loans
Through the Udyogini Yojana, the Indian Government tries to give business loans for women so that they start and sustain their businesses. Hence, besides offering high-value loan amounts, the Government also gives a 30% subsidy on the business loan extended to women entrepreneurs. This further eases the financial burden and makes loan payments affordable.

88 Small-Scale industries covered
The Udyogini Yojana 2023 covers around 88 small-scale industries under its business loan benefits. The list includes-

• Agarbatti Manufacturing
• Audio & Video Cassette Parlours
• Bakeries
• Banana Tender Leaf Processing
• Bangle Manufacturing
• Beauty Parlours
• Bedsheet and Towel Manufacturing
• Book Binding and Note Book Manufacturing
• Bottle Cap Manufacturing
• Cane and Bamboo Article Manufacturing
• Canteens and Catering Businesses
• Chalk Crayon Manufacturing
• Chappal Manufacturing
• Cleaning Powder Manufacturing
• Clinics
• Coffee and Tea Powder Manufacturing
• Condiment Manufacturing
• Corrugated Box Manufacturing
• Cotton Thread Manufacturing
• Creches
• Cut Piece Cloth Trades
• Dairy and Poultry Related Trades
• Diagnostic Laboratories
• Dry Cleaning Businesses
• Dry Fish Trades
• Eat-Outs
• Edible Oil Shops
• Energy Food Manufacturing
• Fair-Price Shops
• Fax Paper Manufacturing
• Fish Stalls
• Gift Article Shops
• Gym Centres
• Handicrafts Manufacturing
• Household Articles Retail Stores
• Ice Cream Parlours
• Ink Manufacturing
• Jam, Jelly and Pickles Manufacturing
• Job Typing and Photocopying Services
• Jute Carpet Manufacturing
• Leaf Cup Manufacturing
• Libraries
• Flour Mills
• Flower Shops
• Footwear Manufacturing
• Fuel Wood Trades
• Mat Weaving Businesses
• Match Box Manufacturing
• Milk Booths
• Mutton Stalls
• Newspaper, Weekly and Monthly Magazine Vending
• Nylon Button Manufacturing
• Old Paper Marts
• Paan and Cigarette Shops
• Paan Leaf or Chewing Leaf Shops
• Papad Making
• Phenyl and Naphthalene Ball Manufacturing
• Photo Studios
• Plastic Article Trades
• Pottery Manufacturing
• Printing and Dyeing of Clothes
• Quilt and Bed Manufacturing
• Radio and TV Servicing Stations
• Ragi Powder Shops
• Readymade Garment Trades
• Real Estate Agencies
• Ribbon Making​​
• Sari and Embroidery Works
• Security Services
• Shikakai Powder Manufacturing
• Shops and Establishments
• Silk Thread Manufacturing
• Silk Weaving
• Silk Worm Rearing
• Soap Oil, Soap Powder and Detergent Cake Manufacturing
• Stationery Shops
• STD Booths
• Sweets Shops
• Tailoring
• Tea Stalls
• Tender Coconut Processing
• Travel Agencies
• Tutorial Centres
• Typing Institutes
• Vegetable and Fruit Vending
• Vermicelli Manufacturing
• Wet Grinding Businesses
• Woollen Garments Manufacturing

Skill Development Training
The Udyogini scheme also imparts various skill development training and capacity-building programmes to women for helping them in establishing their businesses and equip them with the necessary knowledge to effectively manage their day-to-day business operations and enhance competitiveness. The training mostly consists of –

• Business planning
• Pricing
• Costing
• Feasibility of the business

Low or Interest-Free Loans
Financial institutions extending a business loan under the Udyogini Yojana are more generous in funding women from special categories such as widows, and the disabled and destitute. Moreover, women under special categories get interest-free credits under the scheme and are even accorded special privileges.
At FlexiLoans, you can get a quick business loan at business loan interest rates as low as 1% depending on your needs, amount, loan type, and tenure. Such affordable interest rates eliminate the online business loan from becoming a burden and allow you to run a business and make important decisions.

Complete Transparency in Applicant Evaluation
There is complete transparency in the mechanism adopted to evaluate the eligibility criteria and the application form of an applicant before extending the loan. Women entrepreneurs can periodically track their application status, receive updates, and can even access relevant information through the online portal. The transparency in the application evaluation process minimises the scope for malpractices and corruption, thereby ensuring an absolutely fair and impartial selection of beneficiaries and approval of business loans online.

Registration Process Details for Udyogini Yojana

You can register for the Udyogini scheme via both online and offline modes. Given below is the step-by-step process that you need to follow for submitting your application online or offline.

Online Registration Guide

Step 1 – To submit the Udyogini scheme 2023 online application form, visit the official website of the respective banks or NBFCs offering business loans online under the Udyogini scheme.

Step 2- Start the registration process for the Udyogini scheme 2023 online application form by clicking on the sign-up option. You will have to provide certain details like name, contact information, email address, etc., to create your account.

Step 3- Now log in to your account using the username and password created during the registration of the Udyogini scheme 2023 online application form.

Step 4- Click on the apply now button to access the application form and fill in all the required details, such as personal details, financial details, business details, proposed projects, etc.

Step 5- Upload a scanned copy of all the required documents, including address proof, bank statements, business registration documents, etc.

Step 6- Review the entire application for any errors or missing information. Make the necessary changes to ensure accuracy, and submit the Udyogini scheme 2023 online application form. A confirmation message will appear on the screen indicating the successful completion of the registration.

Offline Registration Guide

Step 1- To apply for an Udyogini Yojana business loan offline, you can visit the nearest bank or NBFC offering credit under the initiative. Alternatively, you can avail of the form from the offices of the Deputy Director or CDPO.

Step 2- Fill out the application form for the scheme with all the necessary mentioned details.

Step 3- Submit a photocopy of the required documents to proceed with the formalities.

In both methods, the application forms are first reviewed by the CDPO, who then forwards them to the respective Selection Committee after spot verification. The selection committee then examines and passes on the application details to banks or NBFCs to release the business loan.

Following this, the banks or NBFCs will verify the documents and the project proposal and then process the online business loan application. On approval of the business loan application, the loan amount is either directly disbursed to the applicant’s bank account or the supplier’s account for the equipment, machinery, or any other capital expenditure.

Guidelines of the Udyogini Scheme

It is extremely crucial to go through the guidelines of the Udyogini initiative before starting the application process. These guidelines will provide you with crucial information regarding required documents, eligibility criteria, and any other specific instructions needed for filling out the application form.

Eligibility for the Udyogini Yojana 2023

To apply for a business loan under the Udyogini initiative, you will have to meet the eligibility criteria listed below:

• Gender- The applicant must be a woman.
• Age- Any woman between 18 to 55 years is eligible for the scheme. No age limit for widowed or disabled women
• Income- The annual family income must be Rs. 1.5 lakhs or less.
• Business Type- The Udyogini scheme is available for various types of businesses, including small, micro, medium, etc.
• Collateral– You do not need to submit any collateral to be eligible for the scheme.
• Credit score and Repayment History – Applicants must have a good credit score and clear financial record reflecting repayment ability.

Documents Required for the Udyogini Scheme

Although the eligibility criteria for the scheme are lenient and getting a business loan under this yojana is simple, you will have to mandatorily submit the list of documents mentioned below to initiate your application process.

• Udyogini business loan form with entered details.
• A written recommendation letter on the local MP or MLA’s letter pad.
• Birth certificate.
• Photocopy of your Aadhaar card.
• Photocopy of your ration card.
• Income Certificate.
• Photocopy of your BPL card.
• Photocopy of bank passbook.
• Two passport-size photographs.
• Caste certificate, in the case of the SC/ST category.

The scheme is a significant breakthrough in achieving equality of opportunity for women, especially those residing in rural regions in India. It not only grants financial support but aligns with the agenda of Atmanirbhar Bharat.

Till now the Udyogini Yojana has supported over 7,047 women entrepreneurs in India. Besides this, more than 1,698 villages and 53,762 producers receive financial benefits under the scheme. Also, the initiative supports over 5,432 children in the backward classes and provides a supportive ecosystem for the development of women in Indian society.

Frequently Asked Questions

Q. 1 What is the Udyogini Yojana 2023?

Ans: The Udyogini Scheme 2023 is a financial aid initiative introduced by the Government of India aimed at helping women entrepreneurs, especially those residing in rural and backward areas. Under this initiative, women workers can achieve financial independence and start their businesses with an affordable business loan of up to Rs. 3 lakhs and various other subsidies and grants depending on the nature of their proposed business.

Q. 2 Who can apply for the Udyogini Scheme?

Ans: Any woman between 18-55 years can apply for the Udyogini initiative. The scheme offers business loans online without any discrimination or prejudice based on caste. However, there are some specific eligibility criteria related to income and credit score that you have to meet.

Q. 3 What are the documents needed to apply for the Udyogini scheme?

Ans: To complete your application for the Udyogini Yojana, you will have to submit a photocopy of your birth certificate, Aadhaar card, caste certificate (if any), BPL card, ration card, bank passbook, income certificate, and recommendation letter from local MPs or MLAs.

Q. 4 What type of financial assistance does Udyogini Yojana 2023 offer?

Ans: The scheme offers various types of financial aid, including business loans online, grants, and subsidies for business loan interest rates. Besides this, the Indian Government also facilitates Kisan credit cards, micro-insurance, cash credit linkages, and other ways under this initiative to ensure financial support to the women groups.

Q. 5 What does functional literacy under the Udyogini scheme mean?

Ans: The scheme offers several skill development programmes to promote functional literacy among working women in backward regions. Functional literacy provided under this scheme helps make adult women semi-literate, thereby allowing them to carry out their daily elementary work without help in activities such as reading, writing, performing basic calculations, maintaining records, etc.

Q. 6 Is there any repayment required for financial aid received under the scheme?

Ans: Yes, you will have to repay the business loans online and other financial assistance received under the Udyogini Yojana. However, there are favourable repayment terms and low business loan interest rates are levied on the borrowed amounts. Moreover, the Government also ensures subsidies for business loan interest rates to support women entrepreneurs. You will receive all details related to repayment conditions upon approval of your application.

Q. 7 How do I track the application status under the scheme?

Ans: You can track your Udyogini Scheme application status by visiting the official website and entering your application or reference number in the designated section. You can also directly visit the bank or NBFC under which you have applied for the scheme to track the status of your application, stay updated on its progress and follow any additional steps if required.

Q. 8 Is there any selection process for the Udyogini Scheme 2023?

Ans: Yes, there is a pre-defined selection process for availing business loans online under the Udyogini Yojana 2023. This involves detailed scrutiny of the applications by the District Instructional Centres (DICs), followed by verification of the credentials of the applicants, and personal interviews.

Q. 9 What is the online business loan sanction time under the Udyogini Scheme?

Ans: It usually takes 15 days to sanction a business loan under the Udyogini initiative after the completion of the application process.

Q. 10 When is the EDP training programme provided under the Udyogini initiative?

Ans: You will be eligible to enter the Entrepreneurship Development Programme (EDP) under the Udyogini Yojana after the sanction of your online business loan and before the release of the online business loan amount. The EDP programme is a mandatory training programme offered under the Udyogini Scheme to educate qualified applicants on business management skills such as record keeping, marketing, money management, etc. The training helps the beneficiaries under the scheme manage their day-to-day business operations effectively.