Credit and finance for MSMEs: The central government has softly launched a new credit scheme for women in rural areas to spur the creation of new businesses and jobs in villages, according to a Hindustan Times report, citing officials.
The business finance program will enable individual members of a self-help group (SHG) to obtain bank credit. From now on, SHG members can only get the credit as groups.
Also read: Zoho joins government e-commerce platform ONDC to help small businesses and other sellers sell online
Under the program, SHG members can obtain unsecured loans without any prior entrepreneurial experience, the report said based on an introduction to the program. “Government will provide interest subsidy to individual borrowers on loan up to Rs 1.5 lakh for three years on prompt repayment,” the presentation reads. The government soft-launched the program last week.
Nagendra Nath Sinha, Secretary of the Ministry of Rural Development, said, “The business financing program will create more business opportunities for women. This, in turn, will create more jobs in the rural belts as entrepreneurs would need manpower to run their business. “The program will also help create additional sources of income for women and diversify income to boost the rural economy,” Sinha added according to the report.
Under program guidelines, SHG members who have completed “two loan cycles or a 24-month vintage” are eligible for credit, according to the HT report. In addition, women entrepreneurs without prior experience can also obtain up to Rs 50,000 of credit. For loans up to Rs 2 lakh, members must have two years of experience in their business.
Apart from SHG members, the scheme is also available for sole proprietorships. A government official, quoted by HT, said women between the ages of 21 and 60 can apply for the program.
Also Read: Income Tax Portal Update Early This FY Won’t Impact MSME Benefits Udyam: Govt
The credit scheme was designed with the post-pandemic financial needs of the rural economy in mind, another senior official said.
“The union government’s MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) and Garib Kalyan Yojana, which provides free food grains, have been extremely helpful to millions of rural poor people during this difficult time. But it is high time that rural households can diversify their income,” the official involved in the business financing program said on condition of anonymity.