Everything You Need to Know About the TREAD Scheme for Women-Led MSMEs

 

Women entrepreneurs in India have historically faced unequal access to credit, training, and market opportunities. These challenges are even more pronounced for women from economically disadvantaged backgrounds, particularly those who are illiterate or semi-literate in rural and semi-urban areas. Recognising this structural gap, the Government of India introduced the Trade Related Entrepreneurship Assistance and Development (TREAD) Scheme during the Ninth Five-Year Plan through the Ministry of MSME.

The TREAD scheme was designed as a holistic support system to help women transition from informal economic activities into sustainable, non-farm micro and small enterprises.

What is the TREAD Scheme?

The Trade Related Entrepreneurship Assistance and Development (TREAD) scheme is a government initiative aimed at promoting women entrepreneurship by providing credit support, training, and business development assistance. Unlike conventional loan schemes, TREAD addresses both financial and capability gaps by combining grants, bank loans, and structured mentoring through eligible NGOs.

The scheme supports women-owned MSMEs where women hold at least 51% ownership and management control, and where a majority of employment is generated for women.

Background and Rationale

Experience has shown that lack of access to institutional credit is one of the biggest barriers for women entrepreneurs. Many women lack collateral, credit history, or confidence to approach banks directly. The TREAD scheme bridges this gap by routing credit through experienced NGOs that not only manage funds but also guide women entrepreneurs in running viable businesses.

By focusing on non-farm activities such as handicrafts, food processing, tailoring, and small manufacturing, the scheme promotes income diversification and long-term economic independence.

Key Objectives of the TREAD Scheme

The primary objectives of the scheme include:

  • Improving access to institutional credit for women entrepreneurs

  • Providing entrepreneurship training and counselling

  • Strengthening NGOs as financial and mentoring intermediaries

  • Encouraging sustainable women-led MSMEs

  • Promoting inclusive and region-specific economic development

Salient Features of the TREAD Scheme

Credit Support

Under the scheme, the Government of India provides a grant of up to 30% of the total project cost, subject to a maximum of ₹30 lakh. The remaining 70% is financed as a loan by banks through eligible NGOs.

The NGO must have at least three years of experience in managing grants or loans. While the loan amount is disbursed directly to women beneficiaries, the grant component supports capacity building and approved activities.

Training and Counselling

Training is a core component of the TREAD scheme. Eligible institutions and NGOs can receive a grant of up to ₹1 lakh per training programme. The institution must contribute 25% of the training cost, or 10% in the North-Eastern Region. Each programme must run for at least one month with a minimum batch size of 20 participants.

Research and Need Assessment

The scheme also funds surveys, research studies, and training module design through reputed institutions such as EDIs and MSME-DIs. Grants under this component can go up to ₹5 lakh per project.

Eligibility Criteria

  • Women entrepreneurs from economically weaker sections

  • Enterprises classified as micro or small businesses

  • NGOs with a proven track record in women entrepreneurship

  • Compliance with operational guidelines of the scheme

Documents Required

Applicants must submit:

  • Business registration proof

  • Identity and address proof

  • Detailed project report

  • Bank statements and basic financial records

  • Supporting compliance documents

Application Process

Women entrepreneurs must apply through an eligible NGO. Individual applications are not accepted directly. The NGO submits the project proposal to the Ministry’s Steering Committee. Once approved, the grant and loan components are released in a structured manner.

Conclusion

The TREAD scheme plays a vital role in strengthening women-led MSMEs by combining finance, training, and institutional support. By addressing both economic and social barriers, it enables women entrepreneurs to build sustainable businesses and contribute meaningfully to India’s growth story.

FAQs 

1. Can individual women apply directly for the TREAD scheme?
No. Applications must be routed through eligible and approved NGOs.

2. Is the TREAD scheme limited to rural women entrepreneurs?
No. The scheme supports eligible women entrepreneurs in both rural and urban areas.

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