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Udyogini Scheme: Making Female Entrepreneurs Great Again

Created on 21 Aug 2023

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According to a report from the National Association of Software and Services Companies (Nasscom), approximately 18% of startups in India have a woman founder or co-founder at the helm. This statistic appears to be a promising sign for the advancement of women's entrepreneurship within the country.

Additionally, the Mckinsey Global Institute (MGI) predicts that India will be able to boost its Gross Domestic Product(GDP) by ₹70,000 crores if 68 million more women enter India’s workforce by 2025.

The Indian government is actively implementing initiatives to boost women's entrepreneurship in India. In today’s article, we cover one such scheme that you may not be familiar with yet.

UDYOGINI Scheme: An Introduction

When there was a lack of a structured credit system in India, women entrepreneurs were forced to take loans from private lenders and ended up paying high-interest in return.

The Udyogini scheme was launched to solve this problem. It was initiated in 1997-98 and subsequently amended in 2004-05, by the Government of Karnataka. This initiative is dedicated to empowering women in entrepreneurship by furnishing financial backing and aid to marginalised women, enabling them to successfully establish and operate their businesses. The Indian government in collaboration with Women Entrepreneurs in India introduced this scheme to foster the growth and well-being of women entrepreneurs in India. Below is the list of businesses supported by this scheme. Take a look:

  • Leaf Cup manufacturing
  • Bakeries
  • Dry Cleaning
  • Energy foods
  • Wet grinding
  • Typing Institute
  • Edible Oil Shop
  • Chalk crayon manufacturing
  • Papad making & along with 79 other businesses.

Objectives of the UDYOGINI Scheme

The Udyogini Scheme has been constantly working & caters to the following objectives:-

  • To promote women’s empowerment, self-reliance & financial independence to women entrepreneurs.
  • To supply discounted loans to female entrepreneurs in rural and less developed areas.
  • To provide financial assistance and support
  • To build micro-enterprises led by women, that can contribute to the overall growth of the nation

Features of the Udyogini Scheme

The Udyogini Scheme is a joint initiative by the Indian Government and the Women Entrepreneurs of India, which has the following features:

1. Category: The Udyogini scheme is targeted towards female entrepreneurs in India. No individual male can apply for a subsidised loan under this scheme.

2. Income limit: Women who have an annual family income of ₹1.5 lakh or less are eligible to apply for this scheme. However, there is no income limit for disabled and widowed women.

4. Processing fees: There are neither any processing fees involved nor any collateral required to avail of subsidised loans under this scheme.

5. Loan amount & subsidy: There is a maximum limit of ₹3 lakhs up to which one can apply. The government provides up to 30% subsidy to women to easily repay further extended loans. 

6. Training & Support: This scheme aims to provide financial assistance to underprivileged women in the nation. Apart from financial support, this scheme also aims to impart skills such as business planning, cost-effectiveness, strategy building, and more.

Benefits of the Udyogini Scheme

The Udyogini scheme serves the following benefits to women entrepreneurs in India:

  • This scheme provides functional skills to women entrepreneurs through its Entrepreneurship Development Programme (EDP) training
  • It motivates and encourages women to become successful entrepreneurs and contribute to the growth of the economy.
  • This scheme focuses on the financial independence of women.
  • This scheme provides support and assistance to the underprivileged women of the nation.
The Udyogini scheme has generated an impact across five states, benefiting 300 villages and empowering 50,000 female entrepreneurs. Additionally, it has contributed to the expansion of green cover over 12,000 hectares of land, positively influencing the lives of 10,05,000 individuals thus far.

Eligibility Criteria

A candidate who wishes to apply for a loan under the Udyogini scheme must meet the following eligibility criteria:

  • The applicant must be a female candidate.
  • The applicants must not have any records of defaulting on loan payments with any financial institutions.
  • Applicants with a good CIBIL score and repayment capability will be given priority.
  • The Applicant’s age should fall between 18 to 55 years.
  • Her annual family income should be ₹1.5 lakh or less (except for widowed and disabled women).

Documents required 

The following documents need to be submitted duly with the application form to apply under the Udyogini scheme:

  • Birth certificate
  • Caste certificate, if it is relevant.
  • Income and Address proof
  • Passport size photographs
  • Aadhar card of the applicant
  • Duly filled application form
  • Applicant’s ration card or Below Poverty Line (BPL) card, if it is relevant
  • Copy of the applicant's bank passbook.
  • Any other documents asked by the bank/NBFC

A total of 88 industries in the small-scale business sector are eligible to submit loan applications under this program.

Livelihood Development: The Udyogini Report

Udyogini's emphasis lies in adopting the basket approach, ensuring that rural households generate income from diverse sources, reducing reliance on a single basis and consequently enhancing their sense of security.

The picture below shows the total no. of women engaged from different states in manufacturing the below-listed products.

Steps to apply to the Udyogini Scheme

Applicants can visit the nearest bank to apply for a loan under this scheme. One needs to carry the required documents mentioned above with them and fill out an application form to proceed with the bank formalities.

Another alternative you have is to download the form by visiting the official website of the bank to apply under the scheme. Complete the application form and ensure you attach the necessary documents. Visit the branch office of the bank to submit the form and get regular updates regarding the loan approval.

This program is primarily provided through institutions like Karnataka State Women’s Development Corporation (KSWDC), Punjab and Sind Bank, and Saraswat Bank, along with a range of public sector banks and NBFCs.

The Bottom Line

The Udyogini scheme has been able to transform more than 1 million lives so far. The Indian government has been actively initiating various schemes to promote the overall growth of the economy.

Udyogini scheme is a blessing for all the underprivileged women entrepreneurs of our nation who want to start their own businesses and become self-sufficient.

The objectives of the Udyogini Scheme are a true reflection of the government’s goal to empower women in India. And with 88 small-scale industries eligible for loans under Udyogini, there's great potential for this scheme to perform better in the future.

It is an undeniable fact that the Indian economy needs schemes that promote the participation of more women in its overall growth. The article's opening facts corroborate this statement, leaving no room for doubt.

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Nishita Singh

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If Nishi’s personality were an idiom, it would be “a breath of fresh air”. A refreshing and pleasant person, she brings positive energy around her. She often advises people on life and its complexities. She loves motivating people towards their goals & never runs out of ideas.

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