Intending to generate perpetual and controlled employment opportunities for the women entrepreneur, the Central Bank of India has announced the Cent Kalyani Scheme. The Cent Kalyani Scheme envisaged empowering women entrepreneurs to start new projects or to expand or modernize their existing businesses. Various assistance, under this scheme, is provided to the women entrepreneurs in the form of the capital expenditure on plant or machinery and to meet out their day to day expenses of their business.
A business owned by women faces many problems and financing is one of them. The typical attitude at the workplace towards women entrepreneurs often puts them at a disadvantage in funding opportunities. Due to this, the Government of India has come up with various funding opportunities to promote entrepreneurship among women. The government banks have come up in support of the women entrepreneurs by offering them loans at discounted rates by formulating various schemes.
According to the World Bank survey, the percentage of firms with female participation in ownership is 10.7 percent, while the recent data has shown a steady rise in the number of start-ups founded by women entrepreneurs.
The Cent Kalyani scheme aims to target both existing and new entrepreneurs belonging to micro or small enterprises. Under the Cent Kalyani Scheme, loans up to Rs. 1 crore with a margin rate of 20 % is been provided. The tenure of the loan will be for seven years while no security or collateral will be required.
The Cent Kalyani Scheme aims to harness the full potential of women entrepreneurs that can promote innovation, economic growth, and job creation.
With the steady growth of the Indian economy, the number of start-ups and new businesses has expanded. But often, for women entrepreneurs, it is more difficult to succeed in establishing a business on their own. Due to pronounced cultural biases and lack of business resources, the struggle has been real for them. Indian society has been built in a way where women cannot realize their full potential because of a gender gap prevailing in the country. The measures to minimize the gender gap could lead to a 6.8 percent gain in the Gross Domestic Product (GDP) of India.
According to the study, advancing women’s equality in India can boost the Indian GDP by $0.7 trillion by 2025 or 16 percent as compared to the present scenario. Moreover, to achieve the Sustainable Development Goals (SDGs) by 2030, it is crucial to harness the economic potential of women in India.
According to the Economic Census, out of 58.05 million businesses, 8.05 million were owned by women at the rate of 13.6 % of women among the total numbers of entrepreneurs in India.
Despite high economic growth rates and an increased proportion of working-age women in India, their participation in the workforce has decreased from 35 percent in 2005 to just 26 percent in the year 2018. The percentage of women in a leadership position is as low as nine percent. Unequal education and the gender gap in India is holding women entrepreneurs back. India is ranked 142nd out of 149 countries in the World’s Economic Forum Gender Gap Report. However, the government has launched several schemes on the institutional level to augment the entrepreneurial motivations of women and there is a high political will as well as inspiration to increase the statistics of how more women own businesses.
To start a business in itself is a difficult task, regardless of gender. Major challenges that come in the way of start-ups in India included funds generation; complex regulations, limited understanding of customers, and hiring qualified employees.
It is rightly said by Michelle Obama, ‘’ No country can ever truly flourish if it stifles the potential of its women and deprives itself of the contributions of half of its citizens”. Women constitute half of the total population in India, but their share in labor force participation is low. The women-owned businesses are mainly unorganized and restricted only to the agricultural sector where the growth opportunities for women are limited.
The potential of Indian women has remained untapped while they can be seen as an economic resource. Due to various structural and societal barriers existing in India, women entrepreneurs have come a long way in increasing women’s participation in the economy as a whole.
According to a recent study, reducing the gender gap and increasing women entrepreneurship in India could lead to an approximately 6.8 % increase in the Gross Domestic Product (GDP) of India. This transition of women entrepreneurs has been constantly supported by the government through various schemes and initiatives by building skills and generating employment. The Cent Kalyani scheme is also one of the initiatives of the government bank to promote the women in fulfilling their dreams of establishing their businesses while increasing their share n the economic growth of the Indian economy.
Following are the features of the Cent Kalyani Scheme-
The maximum loan amount sanctioned under this loan is Rs. 1 crore.
The period of repayment of the loan is not mentioned on the bank’s website.
The assets created from the bank’s finance serve as the primary security for the loan under the scheme. The CGTMSE coverage for the loan is asked by the Central Bank of India.
The amount of loan sanctioned under the Cent Kalyani Scheme is Rs. 1 crore.
The Central Bank of India charges 20% as margin money for the loan amount. The margin money refers to the amount that borrower has contributed to the overall amount required in the business. The processing charge applied on the loan has been waived off under the Cent Kalyani Scheme.
The loan provided to the women entrepreneurs will be considered as a Term Loan. Such a loan will be taken as cash, credit, or overdraft if the entrepreneurial venture is fund based. The loan will be with a letter of credit or guarantee if such an entrepreneurial venture is non-fund based.
The maximum amount of loan provided in the Cent Kalyan Scheme by the Central Bank of India is Rs. 100 lakhs which will be available with a margin rate of 20 %.
The rate of interest applied in the Cent Kalyani Scheme will include the base rate of 9.70%, the interest rates for loans of Rs. 10, 00,000 will be 9.95% and for Rs. 10, 00,000-100, 00,000 will be 10.20%.
The loan under the Cent Kalyani Scheme will be charged on stock, any plant, machinery, receivables, unencumbered assets, and types of equipment. No collateral security as advance and no third party guarantee will be required. The processing fee will be levied. The term loan will be for 7 years including a moratorium period of 6 months to 1 year.
To apply for the loan under the Cent Kalyan Scheme the applicant has to download the form from the website, and along with supporting documents at the nearest Central Bank of India. GST will apply to bank services and products at the rate of 18 % from 1st July 2017.
The Global Business community is now recognizing the role of women entrepreneurs. However, the Mastercard Index of Women Entrepreneurs conducted a survey where India ranked with the lowest percentage of women-owned businesses. The Government of India has understood the plight of women entrepreneurs as they have a very tough time taking hold of entrepreneurial opportunities. The perennial problem for women entrepreneurs is of securing finances for their business. Indian Government is increasingly making efforts to promote women entrepreneurs through various government schemes and initiatives giving financial assistance to them.
Our Organization Aatmnirbhar Sena is working in line with all the government schemes and initiatives to finance the women entrepreneurs to start-up their business or to expand their business activities. The Aatmnirbhar Sena is not only aiding in finances but also guiding the women in rural as well as in remote areas to fulfill their dreams of starting up their businesses and providing employment opportunities to the women and other members of their communities.
Thus, with the growth of entrepreneurship, the growth in women’s participation is required for the overall development and the exponential growth of any economy.