Bank of Baroda has launched the Baroda Mahila Swavalamban, a loan initiative specifically designed for women entrepreneurs, featuring attractive interest rates and flexible terms. While the Smart OD scheme is a digital overdraft facility for GST-registered MSMEs.
At a time when a mere 14% of the credit needs of Micro, Small, and Medium Enterprises (MSMEs) are met through formal channels, the public sector Bank of Baroda has launched two loan schemes aimed at facilitating financing for this crucial sector, which significantly contributes to India’s economic development and job creation.
The first initiative, Baroda Mahila Swavalamban, is specifically designed for women entrepreneurs. It offers competitive interest rates starting at 9.15%, linked to the bank’s Repo Linked Lending Rate (BRLLR). The loan amounts available range from Rs 20 lakh to Rs 7.5 crore, with more lenient margin requirements for capital expenditures. For loans up to Rs 5 crore, no collateral is necessary if backed by a guarantee from the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
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The CGTMSE is a government initiative aimed at facilitating access to collateral-free loans.
This scheme includes a 50% discount on processing fees and allows for repayment over a maximum period of 120 months, which includes a moratorium phase. It is accessible to UDYAM and GST-registered enterprises that are at least 51% owned by women.
The UDYAM registration process is free and conducted online, specifically for MSMEs in India.
Baroda Smart OD is aimed at GST-registered businesses, offering a digital overdraft facility. Loan amounts range from ₹0.50 lakh to ₹25 lakh, with interest rates starting at 10%. This scheme requires minimal documentation, has a tenure limit of 12 months, and offers rebates on processing fees.
As reported by the media, Bank of Baroda Executive Director Lal Singh emphasised the bank’s commitment to addressing the credit requirements of MSMEs and bolstering key sectors, particularly those led by women and young entrepreneurs. “The introduction of Baroda Mahila Swavalamban and Baroda Smart OD is in line with the government’s initiatives to foster an inclusive financial ecosystem. These schemes are intended to encourage sustainable economic growth by providing straightforward and efficient access to capital,” he said.
Both schemes are available to both new and existing businesses.
Baroda Mahila Swavalamban Scheme
- Purpose: To promote and assist women entrepreneurs by offering them easy access to loans, thereby empowering them to engage in various income-generating ventures and contributing to economic development and job creation.
- Interest Rates: Starting from the minimum BRLLR of 9.15%, which is the best offer in the industry.
- Financing Options: Loans ranging from ₹20 lakh to ₹7.5 crore.
- Relaxed Margin Norms: For capex loans, the margin norms have been relaxed.
- Collateral Requirements: Loans up to ₹5 crore do not require additional collateral security if guaranteed by CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises).
- Discounts on Processing Fees: A 50% discount on processing fees.
- Longer Repayment Period: Repayment terms extend up to 120 months.
- Eligibility: Enterprises and GST-registered women-owned businesses with a majority stake (minimum 51%) are eligible. Both new and existing customers of Bank of Baroda can apply through any branch nationwide.
Baroda Smart OD Scheme
- Purpose: To provide short-term working capital to GST-registered individual/proprietorship current account holders of the bank.
- Overdraft Limit: The overdraft amount ranges from Rs 50,000 to Rs 25 lakh.
- Tenure: The loan tenure is 12 months.
- Interest Rates: Starting from 10.00% per annum.
- Special Discount: A discount is available on processing fees.
