Stand Up India Scheme

The Stand Up India Scheme, launched by the Government of India, aims to empower Scheduled Caste (SC), Scheduled Tribe (ST), and women entrepreneurs by facilitating bank loans for setting up greenfield enterprises. This initiative plays a crucial role in fostering entrepreneurship, generating employment, and promoting economic growth across the country.

The Stand Up India Scheme is a flagship initiative launched by the Government of India on April 5, 2016, to promote entrepreneurship among women, Scheduled Castes (SCs), and Scheduled Tribes (STs). The scheme aims to empower these groups by facilitating bank loans for setting up greenfield enterprises in the manufacturing, services, or trading sectors. The scheme is part of the broader agenda of financial inclusion and economic empowerment, ensuring that marginalized sections of society have access to financial resources and opportunities to become self-reliant.

Below is a comprehensive overview of the Stand Up India Scheme, including its objectives, features, eligibility criteria, application process, interest rates, and other relevant details.

1. Objectives of the Stand Up India Scheme

Objectives of the Scheme

  • To promote entrepreneurship among SC/ST individuals and women.
  • To provide financial assistance for setting up new businesses.
  • To encourage economic inclusion and self-reliance.
  • To boost job creation in various sectors.

Key Features

  • Provides loans ranging from ₹10 lakh to ₹1 crore.
  • Available for setting up greenfield enterprises in the manufacturing, services, or trading sectors.
  • At least one SC/ST borrower and one woman borrower per bank branch.
  • Composite loan covering 75% of the project cost (inclusive of term loan and working capital).
  • Maximum repayment period: 7 years with a moratorium period of up to 18 months.

 

2. Eligibility Criteria

To avail of the benefits under the Stand Up India Scheme, applicants must meet the following eligibility criteria:

For Individuals

  • The applicant must be a woman, SC, or ST entrepreneur.
  • The applicant must be above 18 years of age.
  • The applicant should not have defaulted on any loans from banks or financial institutions.

For Non-Individual Enterprises

  • At least 51% of the ownership and controlling stake must be held by a woman or SC/ST entrepreneur.
  • The enterprise must be a greenfield project (new venture).

For Enterprises

  • The enterprise must be in the manufacturing, services, or trading sector.
  • The enterprise must not be engaged in activities such as agriculture, retail trading, or activities prohibited by the government.

 

3. Loan Details and Interest Rates

Loan Amount

  • Minimum Loan: ₹10 lakh
  • Maximum Loan: ₹1 crore
  • The loan is a composite loan, including both term loan and working capital.

Interest Rate

  • The interest rate is linked to the MCLR (Marginal Cost of Funds based Lending Rate) and varies by bank.
  • Typically, it is MCLR + a certain percentage (as decided by the bank).
  • The rate is competitive and lower than unsecured business loans.

Repayment Period

  • Maximum 7 years.
  • Moratorium period: up to 18 months.

Margin Money Requirement

  • The borrower must contribute a minimum of 10% of the project cost.

 

4.Key Features of the Stand Up India Scheme

The Stand Up India Scheme has several unique features that make it accessible and beneficial for aspiring entrepreneurs:

Loan Amount

  • The scheme provides bank loans ranging from ₹10 lakh to ₹1 crore for setting up a new enterprise.
  • The loan covers up to 75% of the project cost for non-individual enterprises and up to 100% for individual enterprises.

Eligible Borrowers

  • Women entrepreneurs: Women above 18 years of age.
  • SC/ST entrepreneurs: Individuals belonging to Scheduled Castes or Scheduled Tribes above 18 years of age.

Nature of Enterprise

  • The enterprise must be a greenfield project (first-time venture) in the manufacturing, services, or trading sector.
  • Non-individual enterprises (partnerships or companies) must have at least 51% ownership and control by women or SC/ST entrepreneurs.

Repayment Period

  • The repayment period for the loan is up to 7 years, with a maximum moratorium period of 18 months.

Margin Money

  • The borrower is required to contribute 10% of the project cost as margin money.

Interest Rate

  • The interest rate is as per the RBI’s Marginal Cost of Funds Based Lending Rate (MCLR), plus a maximum spread of 3%.
  • The effective interest rate is typically around 8-12%, depending on the bank and the borrower’s credit profile.

Collateral Security

  • Loans under the scheme are covered under the Credit Guarantee Fund Scheme for Stand-Up India (CGFSI), which provides a guarantee cover of up to 85% of the loan amount.
  • Collateral security is not mandatory for loans up to ₹10 lakh.

Handholding Support

  • The scheme provides handholding support to borrowers through a network of agencies, including the Small Industries Development Bank of India (SIDBI), District Industries Centres (DICs), and other institutions.

 

5.Application Process

The application process for the Stand Up India Scheme is simple and can be completed online or offline. Here’s a step-by-step guide:

Online Application

  1. Visit the Official Website: Go to the Stand Up India portal (www.standupmitra.in).
  2. Register: Create an account by providing basic details such as name, contact information, and Aadhaar number.
  3. Fill the Application Form: Provide details about the proposed enterprise, including the sector, project cost, and loan amount required.
  4. Upload Documents: Upload the necessary documents, such as identity proof, caste certificate (if applicable), and project report.
  5. Submit the Application: Review the application and submit it online.
  6. Track Application Status: Use the application reference number to track the status of your application.

Offline Application

  1. Visit a Bank Branch: Approach any scheduled commercial bank, Regional Rural Bank (RRB), or Small Finance Bank (SFB) that participates in the scheme.
  2. Collect the Application Form: Obtain the Stand Up India loan application form from the bank.
  3. Submit the Form: Fill out the form and submit it along with the required documents.
  4. Follow Up: Stay in touch with the bank for updates on your application.

 

6.Required Documents

Personal Documents

  • Aadhaar Card
  • PAN Card
  • Caste Certificate (for SC/ST applicants)
  • Address Proof
  • Passport-sized Photographs

Business-related Documents

  • Business Plan (including projected financials)
  • Proof of Business Registration (if applicable)
  • Quotations for Machinery & Equipment
  • Trade License (if applicable)

Financial Documents

  • Bank Statements (last 6 months)
  • Income Tax Returns (if applicable)
  • Credit Report from CIBIL or other credit agencies

 

7.Benefits of Stand Up India Scheme

  • Encourages entrepreneurship among marginalized communities.
  • Provides easy access to credit with lower interest rates.
  • Government-backed initiative ensures better approval chances.
  • Flexible repayment options and a long tenure reduce financial burden.
  • Promotes economic growth and employment generation.

 

8.Challenges and Considerations

Common Challenges

  • Lack of awareness about the scheme.
  • Complex documentation process.
  • Difficulty in securing collateral.
  • Limited banking infrastructure in rural areas.

Solutions

  • Increased awareness programs and workshops.
  • Simplified digital application processes.
  • Support from Stand Up India Facilitators (SIDBI, NABARD, DICs).
  • Encouraging collateral-free loans under CGTMSE.

 

9.Role of Banks and Government Support

Banks’ Role

  • Identify eligible borrowers and provide assistance.
  • Facilitate smooth loan processing and disbursal.
  • Offer post-loan support and financial literacy programs.

Government’s Role

  • Provide financial backing to banks through guarantees.
  • Offer training and mentorship programs for entrepreneurs.
  • Regularly update guidelines to improve accessibility.

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