Mahila Udyam Nidhi Scheme

The Mahila Udyam Nidhi Scheme, launched by the Government of India through the Small Industries Development Bank of India (SIDBI), aims to empower women entrepreneurs by providing financial assistance at affordable rates. 

It helps women-led MSMEs bridge equity gaps and establish or expand ventures across manufacturing, production, and service sectors.

The key features of the Mahila Udyam Nidhi Yojana are listed below:

• Women entrepreneurs operating MSMEs are eligible for financial assistance under this scheme for setting up new ventures or expanding existing ones.
  

• The project cost must not exceed ₹10 Lakhs, and up to 25% of the total cost can be availed as a soft loan, subject to a maximum of ₹2.5 Lakhs per project.
  

• The loan can be utilised for manufacturing, production, and service-related activities, as well as for modernisation, diversification, or technology upgradation of existing units.
  

• The repayment tenure is up to 10 years, including a moratorium period of up to 5 years.
  

• Soft loans carry a nominal service charge of 1% per annum, as fixed by SIDBI. Interest rates on accompanying term loans are determined by SIDBI’s refinance structure and may vary across lenders.
  

• No collateral or security is required for loans sanctioned under this scheme.
  

• The financial assistance is provided through banks, NBFCs, and microfinance institutions, with SIDBI acting as the principal funding body.

The key benefits of the Mahila Udyam Nidhi Scheme are listed below:

• Encourages entrepreneurship among women by providing affordable credit options
  

• Generates employment opportunities in small and tiny sectors
  

• Bridges the gender gap in entrepreneurship and promotes economic inclusivity
  

• Supports the revival of viable MSMEs through funding for rehabilitation
  

• Promotes technological advancement through assistance for modernisation and upgradation

The Mahila Udyam Nidhi Scheme eligibility criteria are as follows:

• Only women entrepreneurs are eligible to apply, whether for launching a new venture or expanding an existing one
  

• The business must be owned and managed by women, with at least 51% of the shareholding held by women entrepreneurs
  

• Eligible entities include new and existing MSMEs or Tiny Units promoted by women in the manufacturing or service sectors (excluding road transport operators)
  

• The scheme supports activities such as modernisation, diversification, technology upgradation, and rehabilitation of viable MSME units
  

• The investment ceiling for tiny enterprises covered under the scheme is up to ₹5 Lakhs, as prescribed for this category
  

• The total project cost must not exceed ₹10 Lakhs to qualify for financial assistance under the scheme

Women entrepreneurs can apply for the Mahila Udyam Nidhi Scheme through banks, NBFCs, or directly under SIDBI’s guidance.

Here are the general steps involved:

1. Prepare a detailed project report outlining business objectives, project cost, funding needs, and repayment plan
   

2. Collect all necessary documents including KYC, business registration, and financial details
   

3. Approach a partner financial institution such as a scheduled bank, NBFC, or microfinance institution supported by SIDBI
   

4. Submit the loan application under the Mahila Udyam Nidhi Yojana category along with your project report and required documents
   

5. The lending institution will evaluate project viability and determine eligibility for soft loan assistance
   

6. Upon approval, the loan amount will be sanctioned as per SIDBI norms, and repayment will begin after the moratorium period

Here’s a list of some of the most common businesses approved under the Mahila Udyam Nidhi Yojana:

• Auto-repairing and Servicing Centres
  

• Cable TV Network
  

• Computerised Desktop Publishing
  

• Cyber Café
  

• STD/ISD Booth
  

• Mobile Repairing
  

• TV Repairing
  

• Salon
  

• Tailoring
  

• Typing Centre
  

• Beauty Parlour
  

• Canteen/Restaurants
  

• Creche
  

• Daycare Station
  

• Laundry and Dry Cleaning
  

• Xerox Centre
  

• Road Transport Operator
  

• Servicing of Agricultural and Farm Equipment
  

• Training Institute
  

• Purchase of two-wheelers and four-wheelers for the purpose of business
  

• Washing Machines and other electrical gadgets

The Mahila Udyam Nidhi Scheme plays a vital role in encouraging women entrepreneurs to build and expand their ventures with financial support at affordable terms. By offering soft loans, flexible repayment options, and equity assistance, it helps bridge funding gaps faced by women-led MSMEs.

If you are planning to scale your business further, you can also get a business loan through Bajaj Markets. It comes with competitive interest rates, minimal documentation, and quick approvals, making it easier to meet your working capital or expansion needs.