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Stand Up India Scheme – Eligibility, Key Features and Loan Details

23-Feb-24 12:04 PM

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Posted byPriya SinghPriya Singh on 23-Feb-2024 12:04 PM
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Stand Up India Scheme is a government-backed scheme launched by the Prime Minister of India, Narendra Modi, in 2016. The scheme is administered by the Small Industries Development Bank of India (SIDBI) and is aimed at promoting entrepreneurship among Scheduled Castes (SC), Scheduled Tribes (ST) and Women entrepreneurs.

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The main objective of the Stand Up India Scheme is to provide financial assistance to these underrepresented groups in order to set up new enterprises and also to enhance the existing ones. The scheme provides loans up to Rs. 10 lakhs to these groups for setting up new enterprises in the manufacturing, services, and trading sector.

The scheme also provides an end-to-end facilitation and support to these entrepreneurs, which includes training, mentoring and handholding, from the pre-loan stage to post-loan stage. It also provides financial assistance for purchase of equipment, machinery, and other operational expenses.

To avail the loan under the Stand Up India Scheme, individuals need to have a business plan and meet the eligibility criteria set by the scheme. The loan is provided at a competitive interest rate and the repayment period ranges from 5 to 7 years.

How to Apply for Stand Up India scheme

The Stand Up India scheme is a government initiative to support the growth of small and medium enterprises (SMEs) in India. Here are the steps for applying for the Stand Up India scheme:

  • Eligibility: To be eligible for the Stand Up India scheme, you must be a Scheduled Caste/Scheduled Tribe (SC/ST) or Other Backward Class (OBC) or a woman entrepreneur. You must also be aged between 18 and 45 years and have a credit history of at least five years.
  • Online Registration: Go to the official website of Stand Up India scheme and register yourself. You will have to provide personal, business and financial details while registering.
  • Application Form: Once you have registered, you can fill the online application form. You will have to provide details about your business, credit history, and financial projections.
  • Supporting Documents: You will have to submit all the required documents such as ID and address proof, business registration documents, GST registration, and financial statements.
  • Application Review: After submitting the application and required documents, the authorities will review your application.
  • Approval: If your application is approved, you will receive a sanction letter which will contain the loan amount, interest rate, and repayment schedule.
  • Disbursement: Once the sanction letter is received, the loan amount will be disbursed to the specified bank account.

Note: The process and requirements may vary as per the region and bank. It is always recommended to check the official website or contact the local bank or Nodal office for more information.

Eligibility Criteria for Stand Up India Loan Scheme

The Stand Up India Loan Scheme is a government initiative that provides financial support to first-time entrepreneurs from the Scheduled Castes (SCs), Scheduled Tribes (STs), and women. In order to be eligible for the loan, an individual must meet the following criteria:

  • Age: The individual must be above 18 years of age.
  • Gender and Community: The entrepreneur must either be a woman or belong to the SC or ST community.
  • Type of Venture: Loans will be provided under this scheme only for funding green field projects, which means that the venture is the very first one being undertaken by the applicant under the trade, services or manufacturing sector.
  • Shareholding: If the loan is being taken for a non-individual enterprise, then it is compulsory that a minimum of 51% of the shareholding/controlling stake be held by a woman, SC or ST entrepreneur.
  • Creditworthiness: The loan applicant must not be an existing defaulter to any bank or financial organization.
  • Project/business should be based on innovative/ untested concept and should have potential of employment generation and exports.

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  • Should not be in the business of real estate, construction, financing and chit fund, Nidhi, agricultural or farm sector activities, manufacturing of tobacco products, production and sale of liquor, manufacturing of arms and ammunitions, or in any other activity prohibited by law.

Key factor for the availability and approval of loans under the Stand Up India Scheme

The availability and approval of loans under the Stand Up India Scheme is influenced by a number of factors, including:

  • Location: The borrower's place of residence plays a significant role in determining the availability of loans under this scheme.
  • Category: The category of the borrower i.e. SC, ST or woman is an important factor considered while approving loans under this scheme.
  • Nature of business: The nature of business for which the loan is being sought will also be taken into account, as certain types of businesses may not be eligible for loans under this scheme.
  • Business Premises: The availability of planned business premises is also an important factor considered while approving the loans.
  • Assistance: Whether the borrower needs any assistance to prepare their project plan is also considered.
  • Investment: The amount that the borrower is investing from their own pocket towards the set-up of the business venture is also considered.
  • Margin Money: The scheme also considers whether the borrower requires financial aid to raise the amount of margin money.
  • Prior Experience: Whether the borrower has any prior experience in handling a business is also taken into account while approving the loan.
  • Financial Projections: The financial projections of the business, including projected income and expenses, should be reasonable and credible.
  • Creditworthiness: The creditworthiness of the borrower, including their credit history and credit score, will be assessed by the lending institution before approving the loan.

Key Features of Stand Up India Loan Scheme

The Stand Up India Loan Scheme is a government initiative that provides financial support to first-time entrepreneurs from the Scheduled Castes (SCs), Scheduled Tribes (STs), and women. The scheme offers a composite loan, which includes both a term loan and working capital, to help entrepreneurs establish their businesses. The following are some of the key features of the Stand Up India Loan Scheme:

  • Nature of loan: The loan provided under this scheme is a composite loan that includes both a term loan and working capital, which will be provided to the entrepreneur.

  • Availability of Scheme: The scheme is available through all Scheduled commercial bank branches, and can be accessed either directly at the bank branch, via the Small Industries Development Bank of India's (SIDBI) Stand Up India portal, or via the Lead District Manager.

  • Quantum of loan: The loan amount provided under this scheme ranges between Rs. 10 lakh and Rs. 1 crore. The composite loan amount will cover 75% of the cost of the project. However, this condition will not be applicable in case the contribution of the borrower, along with financial support being provided from any other scheme, amounts to more than 25% of the overall cost of the project.

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  • Purpose of loan: The loan is provided to any woman, SC or ST entrepreneur who is undertaking a venture for the first time under the services, trading or manufacturing sector.

  • Rate of Interest: The interest rate for the Stand Up India scheme shall be the lowest interest rates offered by the bank for the particular category. The interest rate however must not exceed the Tenor premium + 3% + MCLR.

  • Security for loan: In addition to primary security, the loan may require the applicant to provide collateral security or a guarantee of CGFSIL (Credit Guarantee Fund Scheme for Stand Up India Loans), as required by the bank.

  • Repayment of loan: The maximum tenure allowed for repayment of loans taken under this scheme is 7 years, along with a moratorium period of 18 months.

  • Working Capital: For the purpose of drawing working capital up to an amount of Rs 10 lakh, the funds will be sanctioned in the form of overdrafts. A RuPay debit card can also be issued to the borrower for added convenience of withdrawing funds easily. If the working capital required is above Rs. 10 lakh, the same will be provided by cash credit limit.

  • Margin Money: The scheme operates under the assumption that 25% of the margin money for the project will be provided by other state/central government schemes which provide subsidies, the loan applicant is expected to contribute a minimum of 10% of the cost of the project from their own funds.

Stand Up India Scheme has been widely welcomed by the underrepresented groups in India as it provides much-needed financial assistance to set up new enterprises and enhance the existing ones. The scheme has helped in creating new jobs, generating income and boosting economic growth among these groups.

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Conclusion

In conclusion, Stand Up India Scheme is a government-backed scheme that provides financial assistance to Scheduled Castes (SC), Scheduled Tribes (ST) and Women entrepreneurs to set up new enterprises and enhance the existing ones. The scheme provides loan up to Rs. 10 lakhs at a competitive interest rate and end-to-end facilitation and support including training, mentoring and handholding. The scheme has been widely welcomed by the underrepresented groups in India as it helps in creating new jobs, generating income and boosting economic growth among these groups.

FAQs for Stand Up India Loan Scheme

1. What is the Stand Up India Loan Scheme?

The Stand Up India Loan Scheme is a government initiative that provides financial support to first-time entrepreneurs from the Scheduled Castes (SCs), Scheduled Tribes (STs), and women. The scheme offers a composite loan, which includes both a term loan and working capital, to help entrepreneurs establish their businesses.

2. Who is eligible for the Stand Up India Loan Scheme?

The scheme is available for any woman, SC or ST entrepreneur who is undertaking a venture for the first time under the services, trading or manufacturing sector.

3. What is the quantum of loan provided under the scheme?

The loan amount provided under this scheme ranges between Rs. 10 lakh and Rs. 1 crore. The composite loan amount will cover 75% of the cost of the project.

4. How can I apply for the Stand Up India Loan Scheme?

The application form must be submitted along with the relevant documents. You can also invest in the scheme online by visiting the official website of Small Industries Development Bank of India.

5. Is there any collateral required for the loan?

In addition to primary security, the loan may require the applicant to provide collateral security or a guarantee of CGFSIL (Credit Guarantee Fund Scheme for Stand Up India Loans), as required by the bank.

6. What is the rate of interest for the Stand Up India Loan Scheme?

The interest rate for the Stand Up India scheme shall be the lowest interest rates offered by the bank for the particular category. The interest rate however must not exceed the Tenor premium + 3% + MCLR.

7. What is the maximum tenure for repayment of the loan?

The maximum tenure allowed for repayment of loans taken under this scheme is 7 years, along with a moratorium period of 18 months.

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