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.
Women Entrepreneurs in India
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.
Reasons for Low Female Entrepreneurship Rates in India
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.
Importance of Promoting Women Entrepreneurs in India
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.
Features of Cent Kalyani Scheme
Following are the features of the Cent Kalyani Scheme-
- The Cent Kalyani Scheme aims to help small businesses in the MSE sector to finance capital requirements. Such a business must be run by a women entrepreneur.
- Such MSE business must be run by, managed, and controlled by women and partnership where a majority of partners are women.
Loan Amount
The maximum loan amount sanctioned under this loan is Rs. 1 crore.
Repayment Period
The period of repayment of the loan is not mentioned on the bank’s website.
Security
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.
Amount of Loan under Cent Kalyani Scheme
The amount of loan sanctioned under the Cent Kalyani Scheme is Rs. 1 crore.
Interest
- Loans up to Rs. 10 Lakh
The rate of interest for the loan is defined to be ”One year Marginal Cost of Funds Based Lending Rate (MCLR)” of Central Bank of India at 0.25 %. At present, the MCLR rate of the Central Bank of India is 7.10% bringing the effective rate of interest to 7.35%. - Loans above Rs. 10 Lakh up to Rs. 1 crore
The rate of interest for the loans above Rs. 10 lakh and up to Rs. 1 crore is defined as ‘’One-year Marginal Cost of Funds Based Lending Rate’’ of the Central Bank of India is 0.50 %. At present, the (MCLR) of the Central Bank of India is 7.10 % bringing the effective rate to 7.60 %. - Concession
The Central Bank of India offers a concession of 0.25 % rate of interest if such business is rated by an external agency.
Borrower’s Contribution
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.
Documents Required by Individuals
- The applicant and co-applicant, if any, must duly fill and sign the Loan Application Form.
- The passport size photograph of the applicant and co-applicant is required if any.
- Personal ID Proof: PAN Card, Aadhaar Card, Passport, or Driving License. PAN Card or the PAN Card issuing letter is mandatory.
- Signature Proof: Banker’s verification, Driving license, PAN Card, or Passport.
- Proof of Residential Address: Valid rent agreement, Electricity Bill, Post-paid Phone Bill, or Aadhaar Card.
- Income Proof: The Account Statement of the last 6 months transaction of applicant and co-applicant, if any, is required. Loan statements of running Loans, Latest closed loans NOC, Net worth of the applicant and co-applicant is required.
- Security: Marginal money, previous and current sales deed, list of plant and types of machinery, a current valuation report of plant and machinery, photographs of the property, valuation report, and Previous Property Search.
Apply for Sole Proprietorship Registration
Documents for Partnership Firm and Proprietorship
- Application form duly filled and signed by the applicant and co-applicant.
- Partnership Deed and Partnership Registration Certificate.
- Identity Proof of the Firm: Firm PAN Card or PAN Issuing Letter.
- Address Proof of Office: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement.
- Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Audited or CA certified Computation of Income, Trading Account, Profit and Loss Account, Account or Balance sheet, Annual Audit Report, Form 16A is applicable, applicant’s net worth, co-applicants net worth, and guarantors.
- Bank Proof: Last one year’s statement of company’s major account, current account, cash credit account, overdraft account, loan statement of running loans, latest NOC of closed loans, last 6 month’s Bank Statement of applicant’s and co-applicants savings account.
- Security: previous and current sales deed, margin money, list of plant and types of machinery, current valuation report, photographs of properties, previous property search, and Valuation report.
- Other Documents: Partnership’s business profile, promoter’s or guarantor’s profile, corporate brochure, documents supporting business experience, business references.
Apply for Partnership Firm Registration
Documents for Private Limited and Public Limited Companies
- Duly filled and signed application form.
- Company Identity Proof: PAN Card of the company.
- Office Address Proof: Post-paid phone bill, electricity bill, and valid rental agreement.
- Business Proof: AOA and MOA, Incorporation certificate of the company, Board resolution, business commencement certificate, CA or CS verified shareholding pattern, the annual return of ROC, DIN certificate, director’s list, GST number, Form 32 in case of Director is changed.
- Income Proof: Project Report and CMA Data, ITR Acknowledgement copy of company and directors for last 3 years, Tax Audit report with Article 3CB, Article 2D, Article 3CD, TDS certificate, Form 16A, Certificate of Net Worth.
- Banking Proof: Company’s major account statement for last one year, current account, cash credit account, loan statement of running loan, NOC of latest closed loan, last 6 months bank statement of the applicant and co-applicants savings account.
- Security: Margin money, previous and current sales deed, list of plants and types of machinery, current valuation report, property photographs, previous property search, and valuation report.
- Other required documents: Business profile of the company, promoter’s profile, corporate brochure, business experience supporting documents, business references.
Apply for Private Limited Company Registration
Eligibility Criteria for Cent Kalyani Scheme
Finance Availability
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.
Loan Limit
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 %.
Interest Rates of Cent Kalyani Scheme
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%.
Terms of Cent Kalyani Scheme
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.
Conclusion
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.
