You've decided to start a business. The idea is clear, the motivation is strong — but the money isn't there yet. If that describes where you are right now, you're not alone. Millions of women in India face exactly this gap between ambition and access to capital.
The TREAD scheme — Trade Related Entrepreneurship Assistance and Development scheme — was created specifically to address this. Launched by the Ministry of MSME, it brings together grant funding, credit access, and business training in a single programme designed for women from economically weaker sections.
This article explains what the TREAD scheme is, who can benefit from it, how the money works, and what you need to do to apply.
What is the TREAD Scheme?
The TREAD scheme is a government scheme run by the Ministry of Micro, Small and Medium Enterprises (Ministry of MSME). The aim of the scheme is to create economic pathways for women who wish to start or grow a business but lack the collateral, credit history or institutional connections to access mainstream financing on their own.
The scheme is run on a tripartite partnership basis, where the government provides a grant, a bank or financial institution provides a loan and an NGO acts as the facilitator – helping women to get access to the programme, building their skills and supporting them through the process. This structure means you're not navigating the system alone. The NGO is your entry point and your guide.
The TREAD scheme was designed with a specific insight: for women in Tier-2 and Tier-3 cities or rural areas, the barriers to entrepreneurship aren't just financial. They're informational, logistical, and often structural. The NGO partnership model was built to address all three.
What the TREAD Scheme Is Designed to Achieve
The Ministry of MSME TREAD scheme has 3 core objectives that shape how the programme works in practice:
- Economic empowerment: Give women from lower-income groups a concrete route into business ownership and self-employment — not just training, but actual capital to act on it.
- Skill development: Build the business and trade skills women need to run a sustainable enterprise, with training delivered through NGO partners who understand the local context.
- Credit access: Bridge the gap between women who have viable business ideas and the institutional credit they need to fund them, using the government grant as a de-risking mechanism for lenders.
The combined effect is meant to create a pipeline — from awareness to training to funding to enterprise — rather than addressing just one piece of the problem.
How the TREAD Scheme Is Structured: Grant, Loan, and NGO Partnership
Here is how the TREAD scheme is structured:
The grant component is disbursed through SIDBI (Small Industries Development Bank of India), which acts as the channelling agency. The credit component comes from banks or other lending institutions that are willing to extend loans to project beneficiaries. The NGO sits at the centre — identifying women, preparing project proposals, and coordinating between the government, the lender, and the beneficiaries.
Benefits of the TREAD Scheme
If you qualify, here's what the TREAD scheme gives you access to:
Government grant with no repayment obligation
Up to 30% of your total project cost comes as a direct grant — not a loan. This portion does not need to be repaid. For women without savings or collateral, this is often the piece that makes the rest of the financing viable.
Access to institutional credit
The remaining 70% of the project cost is structured as a loan from a bank or financial institution. Because the government grant reduces the lender's risk, women who might not qualify for a conventional business loan may find it easier to access credit under the TREAD scheme.
If you're comparing funding options, it's also worth exploring business loans for women entrepreneurs available through financial institutions outside government schemes.
No collateral requirement
The TREAD scheme is designed to be collateral-free. This is significant. Most formal lending in India requires some form of security — property, gold, or a guarantor with assets. If you don't have those, conventional loans are often out of reach. The TREAD scheme removes that barrier.
Business development and skill training
The NGO partner isn't just a paperwork facilitator. Under the TREAD scheme, NGOs are responsible for delivering training in trade, business development, and relevant skills to the women they support. This can include product development, market access, basic financial literacy, and business planning — depending on the NGO and the sector.
Support for a wide range of business types
The TREAD scheme is not restricted to a single industry. Women can apply to set up or grow businesses in trade, services, manufacturing, agri-processing, handicrafts, and other sectors that the Ministry of MSME recognises as eligible. The NGO's project proposal will specify the business type.
Eligibility Criteria for TREAD Scheme Registration
The TREAD scheme targets a specific group. Before you pursue an application, check whether you fit the eligibility parameters:
- You must be a woman from an economically weaker section or a disadvantaged background — this includes women from below-poverty-line households and marginalised communities.
- You can apply as an individual woman entrepreneur, as a member of a Self-Help Group (SHG), or as part of a women's cooperative or collective.
- You must be working with or through an eligible NGO that is registered under the Societies Registration Act 1860, or similar applicable legislation, and has been in operation for at least 3 years.
- The NGO partner must have a track record in women's development, entrepreneurship, or livelihood programmes — and must submit a viable project proposal on your behalf.
- There is no upper age limit specified, but the scheme is directed at women who are active working age and are genuinely starting or expanding a business.
- Women from rural areas are fully eligible — the TREAD scheme explicitly targets women outside urban centres.
The NGO is the formal applicant in the TREAD scheme structure. As a beneficiary, you work with the NGO, which submits the project proposal to the implementing agency on your behalf. This is worth understanding clearly before you begin.
Documents Required for TREAD Scheme
Documentation requirements are primarily collected and submitted by the NGO. As a beneficiary, you will typically need to provide the following to your NGO partner:
- Proof of identity — Aadhaar card, voter ID, or PAN card
- Proof of address — ration card, utility bill, or any government-issued address document
- Proof of SHG membership or group registration, if applying as part of a collective
- Bank account details in your name
- Any existing business registration documents, if applicable
- Photographs as required by the NGO
The NGO will additionally prepare and submit a full project proposal that includes a business plan, cost estimates, details of the proposed training programme, and confirmation of the lending institution involved. You will not need to submit this yourself, but you should understand what the NGO is preparing on your behalf.
How to Apply for the TREAD Scheme?
You do not apply to the Ministry of MSME directly. The application process runs through an NGO partner. Here is the sequence:
Step 1: Identify an eligible NGO: Look for NGOs in your district or state that are registered under the Societies Registration Act and have a track record in women's entrepreneurship or livelihoods. Your district MSME office can often provide a list of registered NGO partners.
Step 2: Approach the NGO: Speak to the NGO about your business idea, your background, and your interest in the TREAD scheme. They will assess your eligibility and explain the process.
Step 3: NGO prepares the project proposal: If you are eligible, the NGO will prepare a project proposal on your behalf. This proposal goes to SIDBI, which channels the grant funding under the Ministry of MSME TREAD scheme.
Step 4: Loan sanction from lending institution: Once the project is approved, the lending institution (bank or NBFC) sanctions the loan component — the 70% of the project cost that is not covered by the government grant.
Step 5: Fund disbursement and training: After approval, the grant and loan are disbursed, and the NGO begins the training and business development programme.
The timeline from approach to disbursement varies depending on the NGO, the lender, and the complexity of the project proposal. Expect the process to take several months.
Before You Approach an NGO — A Quick Self-Check
Use this checklist to assess your readiness before you contact an NGO partner:
- I have a specific business idea or trade I want to pursue.
- I am from an economically weaker section or marginalised community.
- I am either part of an SHG or willing to work through an NGO-facilitated group.
- I have a bank account in my name (or am willing to open one).
- I have basic identity and address documents available.
- I understand that the scheme funds come through the NGO, not directly from the government.
If most of these apply to you, you're in a position to take the next step. If you're unsure about any point, the NGO will clarify when you meet them.
If you're exploring financing options beyond government schemes — or need a business loan to complement your grant — explore Shriram Business Loan options to understand what's available to you.
Need a Business Loan to Complement the TREAD Scheme?
The TREAD scheme covers up to 70% of your project cost through institutional credit — but if the loan component doesn't come through, or if you're looking to scale beyond what the scheme covers, Shriram Business Loan offers an alternative route.
Check your eligibility for Shriram Business Loan →
You can also use the Shriram Business Loan EMI Calculator to plan your repayments before you apply.
Frequently Asked Questions
How does the TREAD Scheme support women entrepreneurs?
The TREAD scheme supports you through 3 channels simultaneously: a government grant covering up to 30% of your project cost (which you don't repay), a linked loan from a bank for the remaining 70%, and business training and development support delivered through an NGO partner. The combination means you get capital, skills, and institutional backing together — not just one piece of the puzzle.
What types of businesses are covered under the TREAD Scheme?
The scheme covers a broad range of business activities — trade, manufacturing, agri-based enterprises, food processing, handicrafts, services, and other non-farm livelihoods. The specific sectors eligible for support depend on the project proposal submitted by the NGO. There is no single restricted list; the key requirement is that the business must be viable and aligned with the Ministry of MSME's development objectives.
Can women from rural areas apply under the TREAD Scheme?
Yes — and in fact, the scheme was designed with rural and semi-urban women as a primary target group. If you are in a rural area, you are fully eligible. The NGO partner model exists partly to extend the scheme's reach to women who are far from urban financial centres and government offices. Your first step is finding an NGO operating in your district.
What kind of financial assistance does the TREAD Scheme offer?
The TREAD scheme provides 2 types of financial assistance together. First, a government grant of up to 30% of the total project cost — channelled through SIDBI — which does not need to be repaid. Second, a loan from a participating bank or lending institution for the remaining project cost. The grant reduces the loan burden and makes the project financially viable for women who couldn't access credit on standard terms.
Is there any collateral requirement under the scheme?
The TREAD scheme is designed as a collateral-free programme. This is one of its core features — it specifically targets women who may not have property, gold, or other assets to pledge as security. The government grant component acts as a de-risking mechanism for the lending institution, which is why formal collateral is not required from you.