Securing Business loans is still Difficult for Women Entrepreneurs: Study

By: WE Staff | Thursday, 15 September 2022

A study by Bharatiya Yuva Shakti Trust (BYST), a socioeconomic initiative that mentors aspiring entrepreneurs from underprivileged communities, found that at least 60% of women entrepreneurs had difficulties accessing essential financial services and that approximately 85% of them had difficulties obtaining loan services from nationalised banks.

The poll was undertaken as part of the three-year BYST Women Entrepreneurship Development Programme, which aims to foster entrepreneurship in Chennai, Pune, and Delhi-National Capital Region. From February 2019 to August 2022, the programme ran.

As a result, by the time the incubation phase ended in August 2022, 93% of women entrepreneurs had significantly improved their essential skills (banking and entrepreneurship).

“Public sector banks like State Bank of India, Indian Overseas Bank, Union Bank of India and others are extremely happy to welcome loan applications of BYST assisted, under-privileged entrepreneurs who are well-trained, KYC compliant and duly scrutinised by our expert panel before submission to the banks. Branch managers are assured our applicants come with bankable proposals and are in a strong position to sustain their businesses with free mentorship for two years,“ says Lakshmi Venkataraman Venkatesan, Founding and Managing Trustee of BYST, whose organisation works with seven nationalised banks.“These entrepreneurs after attending months of training programmes are well mentored and are therefore safe for banks to give loans to," Venkatesan added.

The outreach goal was to prepare 450 female company owners, with an average age of 34 and an annual household income of less than 2 lakhs, to launch ventures in three locations, including the NCR region. The creation of 10,350 direct and indirect jobs was a related objective.

In addition, BYST makes use of government initiatives like MUDRA and CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) and assists its aspiring business owners in creating bankable proposals for the simple disbursement of loans.

Because of the BYST team's thorough explanation of the procedure, at least 94% of all recipients perceived the process to be straightforward. Only 6% of the beneficiaries found it difficult to deal with the complicated financial terminology and rigorous documentation requirements.

The process of applying for a business loan with a BYST partner bank was simple for 94% of the recipients. According to banking partners, women business owners are most likely to preserve money and repay loans without collateral. 97% of the beneficiaries had made their loan instalments on time, which is a good social behaviour.