Easy loan facility for Covid-hit women entrepreneurs in the offing

The government is planning to hand-hold women entrepreneurs, who are among the worst hit by Covid-19 and its social distancing norms, and a section of very small entrepreneurs, who hardly approach banks for credit, by providing easy loan facility of up to Rs 10 lakh to them.

The loan disbursement plan, which seeks to cut red tape, will be made possible through an alternative banking channel, which can give away credit in a day or two without much paperwork.

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The plan may involve setting up such micro-finance companies that take deposits from people and on-lend to small entrepreneurs, especially women.

“The government’s Rs 21 lakh crore stimulus package has so far not handed out anything directly to businesswomen. An effort is being made to provide them with some economic opportunities as Covid has hit them in a big way due to retail, tourism and hospitality industries and other social sectors, which employ more women, still under stress,” an official in the know of the development, told DH.

Recently, Nobel laureate Muhammad Yunus had urged that micro-finance institutions (MFIs) in India should be allowed to accept deposits from the public.

At present MFIs have to go to the banks for money.

"Finance is the economic oxygen of people. The banking system is not keen to lend money to the poor for which an alternative banking channel has to be developed for them," Yunus, the founder of Bangladesh-based Grameen Bank, said.

Amid the pandemic, even the International Monetary Fund (IMF) has asked governments across the globe to use the full power of their tax and spending toolkit to extend income support to women as the pandemic, the worst since The Great Depression of 1930, threatened to widen gender gaps.

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“It is crucial that policymakers adopt measures to limit the scarring effects of the pandemic on women,” the IMF warned, saying women were more likely than men to work in social sectors such as services industries, retail, tourism, and hospitality that had been hit hardest by social distancing norms.

Following the widespread use of lockdown controls around the world in response to the pandemic, the IMF said women tended to do up to 2.7 hours more unpaid household work than men each day.

“They bear the brunt of family care responsibilities resulting from shutdown measures such as school closures and precautions for vulnerable elderly parents. After shutdown measures have been lifted, women are slower to return to full employment,” it said.