“The Indian government has unveiled a new micro-loan scheme to boost financial independence for women, offering collateral-free loans up to ₹10 lakh with low interest rates. Targeting women entrepreneurs, the initiative aims to support small businesses and economic empowerment. Key features include flexible repayment terms and minimal documentation, making it accessible for women across urban and rural areas.”
Empowering Women Through New Micro-Loan Initiative
On July 3, 2025, the Indian government introduced a transformative micro-loan scheme aimed at fostering financial independence among women. This initiative, launched under the Ministry of Women and Child Development in collaboration with the Ministry of Micro, Small, and Medium Enterprises (MSME), seeks to empower women entrepreneurs by providing accessible financial support to start or expand small businesses.
The scheme offers collateral-free loans of up to ₹10 lakh with competitive interest rates, starting as low as 4% per annum, tailored specifically for women. It targets a wide range of sectors, including handicrafts, food processing, tailoring, and small-scale retail, enabling women to establish or scale up micro-enterprises. The application process has been streamlined, requiring minimal documentation such as identity proof, address proof, and a basic business plan, ensuring accessibility for women from economically weaker sections and rural areas.
A key feature of the scheme is its flexible repayment structure, with tenures ranging from 12 months to 7 years, allowing borrowers to align repayments with their business cash flows. Additionally, the government has partnered with public sector banks, regional rural banks, and microfinance institutions to ensure widespread reach. Non-banking financial companies (NBFCs) and small finance banks are also onboard to expedite loan disbursal, with approvals expected within 7-10 working days.
The initiative builds on the success of existing programs like the Pradhan Mantri Mudra Yojana (PMMY) and Udyogini Scheme, which have collectively disbursed over ₹1.62 billion to women entrepreneurs, as stated by Finance Minister Nirmala Sitharaman in a recent address. Notably, this new scheme introduces a 25-basis-point interest rate discount for women applicants, further reducing financial barriers. It also includes provisions for skill development and entrepreneurship training, ensuring women are equipped to manage their businesses effectively.
Eligibility criteria are inclusive, requiring applicants to be Indian women aged 18 and above, with no upper income limit for urban applicants. For rural applicants, family income should not exceed ₹1.5 lakh annually, with exceptions for widows and differently-abled women. The scheme also encourages group lending for women’s self-help groups (SHGs), fostering collective entrepreneurship.
This initiative comes at a critical time when women’s participation in India’s workforce is on the rise. According to a 2024 report by the Ministry of Labour, women’s labour force participation increased to 37% in 2023, up from 29% in 2019. By providing financial resources, the government aims to further this trend, enabling women to contribute significantly to India’s economy.
The scheme has been lauded by industry experts for its focus on financial inclusion. “This is a game-changer for women in tier-2 and tier-3 cities, where access to credit is limited,” said Priya Sharma, a financial analyst at Deloitte India. However, she cautioned that awareness campaigns and digital literacy programs are essential to ensure rural women can fully leverage the scheme.
Banks and financial institutions have begun rolling out awareness drives, with dedicated helplines and online portals to assist applicants. The government has also allocated ₹500 crore for the scheme’s initial phase, with plans to expand funding based on demand.
Disclaimer: This news report is based on information from government announcements, official statements, and financial industry sources. Readers are advised to verify eligibility and terms with relevant authorities before applying for loans. Always exercise due diligence when making financial decisions.