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Ahmedabad: As industrial and commercial activity has regained momentum after the Covid-19 lockdown and spikes, credit drawdowns to MSMEs and all other sectors have improved. But new payouts to women entrepreneurs showed the strongest growth in 2021-22, up 75% from 2020-21 figures, and the number of recipients increased by 99%.
New loans to the tune of Rs 35,560 crore were granted to women entrepreneurs in 2021-22, up from Rs 20,132 crore in 2020-21, according to the latest data compiled by the State Level Bankers’ Committee (SLCB), Gujarat. The number of beneficiaries increased from 7.87 lakh to 15.67 lakh during the period under review.
Some bankers, however, suggest that the growth in the number of beneficiaries may not paint the true picture. “In many cases, a business is simply registered in the name of a woman who owns more than 50% of a company’s equity,” a banking industry source said. “However, aside from the stakes, women are hardly seen at the forefront of business operations. Often, new companies or subsidiaries of existing companies are also registered in the name of the spouses of businessmen or their daughters and, in this case too, loans are granted.
Loans for female entrepreneurs, sources say, are available at lower interest rates and have easy disbursement procedures compared to other business loans. Therefore, the loans should attract many.
“Shortly after the peak of the pandemic, working capital and cash shortages were major concerns for many MSMEs and even large enterprises due to increasing cost pressures from logistics, shipping and raw materials,” another source said. “A number of companies, including MSMEs, have therefore applied for additional credits. The doubling of the number of female beneficiaries could also be the result.
Additionally, industry players have stated that the trend cannot be entirely attributed to businesses registering in women’s names. Patik PatwariSenior Vice President of the Gujarat Chamber of Commerce and Industry (GCCI), said, “In sectors such as IT, food processing, design, garment manufacturing, pharmaceuticals and lifestyle products, a number of women have gone into their own business and are doing very well. Patwari added: “Traditionally, it was common to register businesses in the name of women to qualify for low-interest loans and other benefits and grants.” He went on to say, “However, a significant and growing number of women have also taken the lead in their own businesses.”
The total outstanding loans granted to female entrepreneurs in Gujarat stood at Rs 89,609 crore in 2021-22, up by 44.3% from Rs 60,695 crore in 2020-21.
According to the bankers, loans provided under the Emergency Line of Credit Guarantee Scheme to Women Entrepreneurs also fall under this category, which could be one of the reasons for the increase.