THE latest scheme by the State Bank to encourage credit provision for women entrepreneurs is a welcome move and should be followed up with further action. That follow-up action can come from strengthening the initiative as lessons are learnt from its implementation, as well as launching further schemes that specifically try to reach women. For the moment, though, the priority should be to raise awareness about the existence of the scheme, and it should be understood that commercial banks through whom it will operate may be reluctant to help get the word out. Towards this end, perhaps some non-monetary incentive can be announced for banks that lead the way in signing up women entrepreneurs for the scheme, perhaps through an award or other marketing aid. Raising awareness and going out of the way to get applications under the scheme will be crucial to its success.
Assistance also needs to be provided for new women entrepreneurs who have ideas for a business but need mentoring to be able to properly implement them. The scheme has a ceiling of Rs1.5m per loan over a maximum period of five years, at a fixed rate of 5pc, which means it is targeting small ideas for the moment. This is fine and an improvement from the years when extended credit and financial support to women entrepreneurs from underserved areas was left to microfinance banks only. But a road map for promoting inclusive growth should see higher ceilings in times to come as well as longer periods. Also, loans for buying assets, eg housing loans, should be developed specifically targeting women from underserved areas in the initial phase. It needs to be understood that promoting inclusive growth will take more than a few schemes in the long run. It may sound difficult but in due course far more attention needs to be given to this important objective to make it a structural part of our economic thinking.