Women entrepreneurs still struggle to get business loans: study

According to a study conducted by Bharatiya Yuva Shakti Trust (BYST), a socio-economic initiative that mentors aspiring entrepreneurs from disadvantaged communities.

The survey was conducted as part of a three-year BYST Women’s Entrepreneurship Development Program aimed at building profitable businesses in Chennai, Pune and Delhi NCR, aimed at boosting entrepreneurship. The program ran from February 2019 to August 2022.

As a result, at the end of the incubation period in August 2022, key skills (banking and entrepreneurship) improved significantly for around 93% of female entrepreneurs.

“Public sector banks like State Bank of India, Indian Overseas Bank, Union Bank of India and others are extremely happy to welcome loan applications from underprivileged entrepreneurs assisted by BYST who are well-trained, KYC-compliant and duly vetted by our panel of experts before submission to banks.Branch managers are assured that our candidates come with bankable proposals and are in a strong position to support their businesses with free mentorship during two years,” says Lakshmi Venkataraman Venkatesan, founder and managing director of BYST, whose organization works with seven nationalized banks. ‘provide loans,’ Venkatesan added.

The outreach objective was to prepare 450 female entrepreneurs, whose average age was 34 and household income was below 2 lakhs per year, to set up businesses in three cities including the NCR region. A related objective was to generate direct and indirect employment for 10,350 workers.

Among others, BYST also relies on government programs such as MUDRA and CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) and helps its budding entrepreneurs prepare bankable proposals for loan disbursement on easy terms.

At least 94% of all grantees found the process smooth thanks to a detailed explanation of the steps by the BYST team. The requirement for detailed documentation and complex financial jargon proved difficult for only 6% of recipients.

94% of beneficiaries found the process of obtaining a business loan from a BYST partner bank smooth. Banking partners believe that female entrepreneurs are most likely to save money and repay unsecured loans. 97% of beneficiaries had not defaulted on loan repayments, a positive social habit.

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