Introduction
Women entrepreneurs constitute about 13.76% - 14% of the total entrepreneurs operating micro, small, and medium enterprises in India. States like Tamil Nadu, Kerala, Andhra Pradesh, West Bengal, and Maharashtra, having high rates of literacy for women and high labour participation of women entrepreneurs, have been productive states. To enhance women's entrepreneurship, the Government of India is introducing back-to-back new schemes and subsidies for women. Among them, the Mahila Udyam Nidhi Scheme is one which provieds the assistance and support to set up small-scale businesses or expand existing enterprises.
Under this scheme, women enterprenures gets the loan of up to ₹10,00,000. Mahila Udyam Nidhi Scheme is a beneficial scheme for women entrepreneurs facing challenges in obtaining collateral-free funding for the establishment and growth of registered small enterprises. One can read this guide to understand how the Mahila Udyam Nidhi scheme loan for women works, what the eligibility parameters are, and how to apply for it online.
What Is the Mahila Udyam Nidhi Scheme?
Mahila Udyam Nidhi Scheme is a financial assistance program for women entrepreneurs. The Punjab National Bank (PNB) is currently the leading operator running and managing this scheme's activities in India. Under this scheme, women get interest-free funding, a soft loan up to 25% of the project cost (equity gap), covering a loan amount up to ₹10 lakh, including provides the benefit of a long repayment tenure with a moratorium. Back in history, the Mahila Udyam Nidhi Scheme was first launched by the Industrial Development Bank of India (IDBI) in 1987.
It was launched in response to provide access to soft loans to women entrepreneurs to establish industrial projects. But in 1990, it was transferred to the Small Industries Development Bank of India (SIDBI) as it was selected as the principal financial institution for India's small-scale sector. Upon its transfer, SIDBI structured the scheme guidelines and added 25% of the project cost (capped at 2.5 lakh) to a ₹10 lakh project cost alongside a regular term loan.
The scheme was discontinued by SIDBI, but Punjab National Bank (PNB) still continued to provide the Mahila Udyam Nidhi-branded MSME loan product. Further, this scheme continues under SIDBI’s original framework.
What Are the Key Benefits of Mahila Udyam Nidhi Scheme?
Features of the loan for women make this scheme more ideal for those who are looking for funding to scale up their micro, small, or medium enterprise. These are the major Mahila Udyam Nidhi Scheme benefits:
- Collateral-Free Credit: Women entrepreneurs can easily get the funding without worrying about collateral or securing a third-party guarantee.
- Concessional Interest Rate: Under this scheme, you get soft loans and interest subsidies, significantly lowering the cost of borrowing. It effectively makes capital affordable for early-stage ventures.
- Extended Repayment Tenure: To reduce the financial cash flow burden, the scheme offers a long-term repayment timeline of up to 10 years.
- Flexible Moratorium Period: Offers women entrepreneurs an extended period of 5 years to pay back the principal amount and allow them to set up their businesses and earn revenue during the moratorium period.
- Broad Sector Coverage: The scheme provides coverage of various sectors of the economy, including manufacturing, services, and technologically driven enterprises.
- Grow Economy & Job Creation: Supports the notable growth of the economy through the mechanisms of the participation of the female section of society in entrepreneurship. Moreover, starting a small or medium enterprise contributes to the local economy by creating sustainable jobs.
Mahila Udyam Nidhi Scheme Eligibility
Like other schemes, women are also required to fulfil the Mahila Udyam Nidhi scheme requirements before filing for a loan. As a woman entrepreneur, you must meet all these obligations:
- Women Entrepreneurship Ownership: Only female entrepreneurs can apply for this scheme. Further, they must hold a minimum of 51% financial stake and managerial control in the business.
- Enterprise Type: Whether it is newly registered businesses or existing Micro, Small, and Medium Enterprises (MSMEs), Tiny Units, and Small Scale Industries (SSIs) can apply for this scheme to secure financial assistance.
- Sectors Covered: The scheme covers broad business activities. If you are active as a manufacturer, producer, trader, or in the service sector, then you are eligible.
- Age & Legal Capacity: The age of the woman entrepreneur must be 18 or above, and she must have the capacity to enter into financial contracts.
- Project Cost: The cost of the business project must be within a ₹10 lakh ceiling,
What Businesses Are Eligible for the Mahila Udyam Nidhi Scheme?
The project cost of the Mahila Udyam Nidhi scheme does not depend on the specific business activity; instead, as long as your business total outlay is under the ₹10 lakh ceiling and meets all enviormental/ statutory norms, your business is eligible for this scheme to get the financial assistance. These are the business categories with practical examples:
1. Manufacturing & Production
- Ready-made garment manufacturing
- Bakery & confectionery units
- Spice grinding & packaging
- Handloom & handicraft products
- Corrugated box packaging
- Small machinery component fabrication
- Eco-friendly bag & paper cup production
2. Service-Based Business
- Beauty parlours, salons & spas
- Tailoring boutiques & alteration shops
- Daycare centres & crèches
- Common Service Centres (CSC) & cyber cafés
- Mobile & consumer electronics repair shops
- Coaching & tuition centers
- Event management & catering services
3. Trading & Retail
- Ready-made garment retail shops
- Kirana & departmental stores
- Stationery & book stores
- Small restaurants, cafés & food trucks
- Cosmetics & personal care retail
- Footwear & leather goods retail
- Organic food & grocery stores
Work-Based Example: Soft Loan Calculation
Consider Priya, who is a budding entrepreneur setting up a custom-tailoring boutique that will cost ₹6 lakh. To set up the boutique, she requires ₹6 lakh, which will be spent on purchasing sewing machines, fabric raw materials, and shop rent. The soft loan option provided to her via the Mahila Udyam Nidhi scheme will take care of a maximum of 25% of the total project cost, with a maximum limit of ₹2.5 lakh. In this regard, we can say that:
The Soft Loan Portion (Low-Interest Discount):
- ₹6,000,000 x 25%= ₹1.5 lakh
(As the ₹1.5 lakh is still below the capped amount of ₹2.5 lakh, Priya will get the full ₹1.5 lakh at the discounted soft-loan rate.)
Regular Bank Loan
Priya will take a standard bank loan (or use a mix of a standard loan and her savings) to cover the rest aount ₹4.5 lakh.
Through this, she get the relife for paying the full interest on EMIs; instead, she pays a small amount with no interest on the ₹1.5 lakh. It helps her to focus on business operations without worrying about the EMI burden.
Note: The following example is only illustrative for understanding purposes, and it does not present the actual guaranteed offer. The actual loan structure entirely depends on the specific bank appraisal and project visibility.
Documents Required for Mahila Udyam Nidhi
Identity, address, and other registration documents are required to submit while applying for this scheme. Here is the complete checklist of documents that you are required to provide:
- Loan Application: Duly filed and signed loan application form
- Identity Proof: Applicant’s Aadhaar card, voter ID, PAN card, or passport
- Address Proof: Rent agreement, recent utility bill.
- Photographs: Recent passport-size photographs of the applicant (at least 2-3)
- Project Report: Complete details of your business plan that must cover estimated costs, revenue projections, and the purpose of the loan.
- Business Registration: Udyam registration certificate, existing SSI-MSME status, or proof of business registration.
- Business Ownership Proof: partnership deed, proprietorship declaration, or shareholding proof to declare the 51% stake in the company.
- NOC (if Applicable): If premise is rented, get the NOC (No Objection Certificate) from the landlord.
- Bank Details: Bank account statement for the last 6 months.
- Operational Details: If the company is already managing its operations, then provide income proof/ IT returns.
- Product Quotations: Quotations of all purchased machinery, equipment, or raw material.
How to Apply for Mahila Udyam Nidhi Scheme Online?
The Mahila Udyam Nidhi Scheme is no longer managed by the Small Industries Development Bank of India (SIDBI); therefore, contacting this authority may cause your application to be rejected. To apply for the Mahila Udyam Nidhi scheme, visit Punjab National Bank (PNB). The process is as follows:
Step 1: Visit the official PNB Website
Visit the official website of the Punjab National Bank (PNB), pnbindia.in.
Step 2: Search for the Scheme
On the portal dashboard, type “Mahila Udyam Nidhi scheme” or the relevant “Mahila Udyami” scheme.
Step 3: Locate the MSME Scheme Loan
The portal displays the list of schemes. In the list, look for the relevant MSME/women-enterprenure loan category.
Step 4: Navigate the Application Form
Upon clicking on the relevant scheme category, the portal redirects to the specific application form page. Download the application form and download it.
Step 5: Attach Supported Documents
With the application form, attach the scanned copies of documents that include ID proof, address proof, business plan, Udyam registration, bank statement, etc. Must ensure that all documents are in the correct format and in order.
Step 6: Submit for Verification
If applying online, you can submit the application form on the portal. Otherwise, you can visit your nearest bank branch. Confirm earlier on the bank's site.
Step 7: Track Your Application
Download the acknowledgment/ reference number to track the application status. The estimated timeline is 15-45 days from the application submission.
Offline Filing Mode for Mahila Udyam Nidhi Scheme
If you prefer offline application filing, you must visit your nearest PNB branch (or any other applicable bank). From the bank, collect the physical application form from the loan/MSME desk. With the application form, attach the photocopies of all required documents. Further, you must keep the branch receipt/ acknowledgment for application tracking.
Sister Schemes at Other Banks
Beyond the Mahila Udyam Nidhi scheme, you can further leverage the other major public-sector banks that provide credit packages designed to meet the MSME and business financing needs. The major sister schemes at other banks include:
- SBI’s Stree Shakti Scheme: The Stree Shakti scheme is operated by the State Bank of India, which provides financial assistance to women who hold 50%-51% ownership. Under this scheme, the women entrepreneurs get interest rate concessions (typically 0.5% for loans above ₹2 Lakh) and collateral-free options up to ₹5 Lakh.
- Bank of Baroda’s “Bob Mahila Shakti”: The scheme is applicable for resident women entrepreneurs and individual account holders. Under this scheme, the eligible individuals get free concessions on credit facilities and retail loan processing discounts.
- Canara Bank’s ‘Canara Mahila Vikas’ Scheme: Designed for women who own micro, small, and medium enterprises with 51% shareholding. Applicants get a minimum loan of up to ₹10 lakh for the purpose of business premises, machinery, equipment, vehicles, or to manage working capital for manufacturing, services, trading, and retail businesses.
- Central Bank of India’s ‘Cent Kalyani’ Scheme: It is a specialized MSME loan scheme for women entrepreneurs. The eligible entities get working capital and term loans up to ₹1 Crore with no third-party guarantors. The processing fee is also nil.
Conclusion
To enhance women entrepreneurship, the Government of India and private institutions are working effectively by introducing the collateral-free scheme. It helps women entrepreneurs to scale up business operations without worrying about the loan interest burden. Make your entrepreneurship journey easier and error-free with JustStart as we assist with managing the documentation and provide guidance for application filing.
Frequently Asked Questions (FAQs)
Q1. What is the Mahila Udyam Nidhi Scheme and who runs it?
Ans. The Mahila Udyam Nidhi scheme is a soft-loan scheme to aid female entrepreneurs. This scheme enables female entrepreneurs to set up or expand small businesses without much involvement of capital investment in the business. The scheme is run by Punjab National Bank now, as per the guidelines of the Small Industries Development Bank of India.
Q2. What is the maximum loan amount under the Mahila Udyam Nidhi Scheme?
Ans. Under the Mahila Udyam Nidhi scheme, women entrepreneurs can access loans for project cost up to ₹10 lakh. Of that, the scheme provides up to 25% of the project cost (capped at ₹2.5 lakh) as a soft-loan component.
Q3. Is the Mahila Udyam Nidhi Scheme still active in 2026?
Ans. There is no specific source available on internent which clearly mentions the current status of the scheme. However, the scheme is not active nationally in its original SIDBI form, but its original framework remains in operation through PNB (Punjab National Bank) as of 2026. To confirm availability, visit your nearest bank branch.
Q4. Is collateral necessary for taking this loan?
Ans. No, the best thing about the Mahila Udyam Nidhi Scheme is that it does not require collateral.
Q5. What are the eligibility requirements for applying for the Mahila Udyam Nidhi scheme?
Ans. To apply for an MSME loan for women under this scheme, a candidate needs to have at least 51% ownership in the business. Moreover, the business must meet the definition of either an MSME or an SSI, and the project cost of the business must be less than ₹10 lakh.
