Mahila Udyam Nidhi Scheme

Small Industrial Development Bank of India (SIDBI) has launched the Mahila Udyam Nidhi Scheme, which provides credit facilities and financial assistance to women entrepreneurs, who are into production, manufacturing, and service-related industries. 

This loan was first started by Punjab National Bank, under the guidance of SIDBI, but to the success of this program, other banks were also included in this scheme.


Here are the Mahila Udyam Nidhi Scheme Details

  • SIDBI provides financial assistance in the form of loans of up to Rs 10 lakh to women entrepreneurs and SMEs
  • Up to 25% of the project cost can be availed as a loan under Mahila Udyam Nidhi Scheme, with a ₹2.5 lakh ceiling for every project
  • SIDBI powers the loan, but banks do the allocation of the loan.
  • The interest rate applicable is low and subsidized, but different banks have different interest rates. The final interest rate depends on the credit history of the applicant, location of the business, and type of business.
  • As per the rules, a service charge of 1% is charged by the banks, per year for this loan program for women. In some cases, this service fee can be waived off, but it will depend on the lending authority.
  • This loan can be used to open a business in the areas of production, manufacturing, and services. The loan can also be used to upgrade and enhance existing production/manufacturing units, and to upgrade technology for the services industry
  • Loan repayment is allowed up to 10 years, and the loan moratorium can be extended till 5 years


The eligibility criteria for getting the loan approval are:

  • This loan is only for women entrepreneurs, who are launching a new business or running a new business (Micro, Medium, and Small enterprises)
  • The ownership and financial holding of the women entrepreneurs should not be less than 51% of the overall value of the company
  • The business should be engaged in Manufacturing, Services or Production.
  • The minimum investment made by the business (Micro, Small or Medium) should be Rs 5 lakhs.
  • The loan can be only used for these business activities: Upgradation of service, Upgradation of machines/equipment, business expansion, business improvement, diversification, or launching a new business with the above eligibility criteria in the eligible business models.


Benefits of Mahila Udyog Nidhi Yojana

  • Promotes women entrepreneurs
  • Increases employment opportunities in the tiny and small scale sectors
  • Helps to meet the gap in equity
  • Rehabilitates weak SSI units
  • Expansion, modernization and technology upgradation of service industries


Which Businesses are Approved Under Mahila Udyam Nidhi Scheme?

The following list of businesses run and managed by women entrepreneurs can avail a Mahila Loan Scheme (women loan program) under Mahila Udyam Nidhi Scheme SIDBI:

  • Repairing of Mobile, TV (LED, LCD and CRT), washing machines, refrigerators, and other electronics appliances
  • Daycare for children and Crèche
  • Garage and auto-repair centre for two-wheelers and four-wheelers
  • Servicing of farm equipment and agricultural equipment
  • Beauty Parlour and Spa
  • Cable TV Network
  • Eateries, Restaurants, Dhabas
  • Photocopying centre (Xerox)
  • DTP or Desktop Publishing business (Fully computerized)
  • Tailoring shop and/or training institutes OR Laundry & Dry Cleaning
  • Cyber Cafes Educational centres/ training institutes
  • Purchasing auto-rickshaws, two-wheelers, four-wheelers for business purpose
  • Road transport business (handling, managing, driving trucks, pick-up vans)



This is one of the most well-known initiative available in India to help female entrepreneurs in India. Women can benefit from this program because they provide a fair playing field. There is no denying that women can be successful business owners. However, we must remove social barriers, and this program is the step in that direction. With the government schemes for female entrepreneurs in India, It will help Women to promote their businesses and support them to borrow funds for business at a minimum interest rate.



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