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Women Enterprise Acceleration Fund

Women Enterprise Acceleration Fund has been created to empower women entrepreneurs.

What is the objective of Women Enterprise Acceleration Fund?

A dedicated ‘Women Enterprise Acceleration Fund’ has been set up to catalyse and make available medium term to long term debt financing to women entrepreneurs to enable them to invest in viable enterprises. This fund will also incentivize first-time women entrepreneurs to start their enterprises and also support existing women-owned enterprises to grow and scale-up.

What are the schemes under Women Enterprise Acceleration Fund?

Individual women-led enterprises would be provided the following benefits under Women Enterprise Acceleration Fund –

Reimbursement of Credit Guarantee fees to lending institutions

  • The fund will extend support in form of reimbursement of actual credit guarantee fees incurred by banks / financial institutions for taking credit guarantee cover under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) or Credit Guarantee Fund for Micro Units (CGFMU) under National Credit Guarantee Trustee Company Ltd (NCGTC). 
  • Actual credit guarantee fees will be reimbursed to banks / lending institutions for providing loans to individual women Self Help Group (SHG) members under Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM) for loans up to ₹5 Lakh for a maximum period of 5 years. 
  • In case of loan amount exceeding ₹5 lakh, reimbursement of credit guarantee fees will be done in proportion to the loan amount.

Interest Subvention on Prompt Repayment

  • Women entrepreneurs making prompt repayment of credit to financial institutions will be provided 2% interest subvention. 
  • The interest subvention will be provided to SHGs on loan outstanding up to ₹1.5 lakh per borrower. 
  • In case of loan outstanding amount exceeding ₹1.5 lakh, interest subvention will be limited to the ceiling of ₹1.5 lakh only. 
  • Interest subvention will be provided to individual women entrepreneur up to a maximum duration of 3 years.

The above benefits will be provided to an individual only once.

How will the schemes under Women Enterprise Acceleration Fund be implemented?

The implementation of schemes under Women Enterprise Acceleration Fund will be managed by the same Nodal Bank implementing the Interest Subvention Scheme for Women SHGs under DAY-NRLM. 

Reimbursement of credit guarantee fees to lending institutions

  • Credit Guarantee fees charged (on actual basis) by CGTMSE or CGFMU under NCGTC for loans extended to individual women SHG members under DAY-NRLM only will be considered for reimbursement.
  • Reimbursement of credit guarantee fees will be considered for a borrower only once.

Interest Subvention on Bank loan to individual SHG members for enterprises

  • The scheme is limited to Women SHG members being supported under DAY - NRLM in rural areas only.
  • Interest subvention will be provided to an individual women entrepreneur only once.
  • All banks extending credit for enterprises fully or partially owned by women SHG members under DAY-NRLM at interest rate equivalent to (1-year MCLR + max 3% spread) or maximum of 14% per annum will be eligible to claim interest subvention.
  • Lending Institutions should ensure that overlapping interest subvention schemes from multiple sources should not be combined for a single borrower.
  • Interest subvention can be claimed only for the period the account remained standard. No interest subvention will be payable for the period the account remained classified as ‘Non-Performing Asset (NPA)’. In case account classified as NPA subsequently turns as standard asset on account of recovery of overdues, no subvention amount will be payable for the period the account remained classified as NPA.
  • Participating banks should credit the interest subvention amount in respective loan account within 3 days of the receipt of funds from Nodal Bank. In case the loan account is closed prior to credit of the interest subvention account, credit of the amount should be done in the savings account (if any) of the same customers. In case any amount could not be credited to respective beneficiary account, the same should be returned to Department of Rural Development (DoRD).


References

Reserve Bank of India. (2024, April 16). 'Master Circular – Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12665&Mode=0


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