Stand-Up India Scheme

✦Key Features

• Loans: ₹10 lakh to ₹1 crore for greenfield enterprises in manufacturing/services/trade
• Mandate: at least 1 SC/ST + 1 woman borrower per bank branch (every scheduled commercial bank)
• 1.16 lakh+ loans sanctioned; 81% women borrowers
• CGTMSE credit guarantee available; composite loan includes working capital
• Margin money: 25% of project; applicant contributes minimum 10%
• SIDBI (Small Industries Development Bank of India) is nodal agency
• Portal: standupmitra.in for application, trainers, incubators

✓Eligibility Criteria

• The applicant must be a woman or an individual belonging to the Scheduled Caste (SC) or Scheduled Tribe (ST) category.
• The borrower must be above 18 years of age and the project must be a greenfield enterprise.
• The scheme applies to enterprises in the manufacturing, services, agri-allied activities, or the trading sector.
• In case of non-individual enterprises, at least 51 percent of the shareholding must be held by an SC/ST or woman entrepreneur.
• The borrower should not be in default to any bank or financial institution at the time of application.

★Benefits

• Access to composite bank loans ranging from 10 lakh rupees to 100 lakh rupees for setting up new businesses.
• The scheme provides a credit guarantee cover through the Credit Guarantee Fund Scheme for Stand-Up India.
• Borrowers benefit from lower interest rates which shall not exceed the base rate (MCLR) plus 3 percent.
• Extensive handholding support is provided through a network of agencies for mentoring, licensing, and marketing.
• Repayment of the loan can be done over a period of seven years with a maximum moratorium period of 18 months.

▶Application Process

• Applicants can apply directly at a bank branch or through the Stand-Up India online portal.
• The portal offers a 'Handholding Support' module where applicants can seek help with business plans and financial training.
• The borrower submits a formal loan application along with a detailed project report to the selected bank.
• The bank conducts a credit appraisal and processes the loan within the stipulated timeframe of the scheme guidelines.
• Once approved, the loan is disbursed as a composite loan involving both term loan and working capital components.

₹ Budget Allocation

1000

Funding Ratio (Centre:State): Operated through Commercial Banks; Credit Guarantee provided by the Central Government via NCGTC.

Historical Context

Launched on April 5, 2016, to promote entrepreneurship at the grassroots level, specifically focusing on those often excluded from the formal credit market.

Sub-Schemes

Challenges

• High NPA (Non-Performing Asset) risk in the 'first-generation entrepreneur' segment.
• Difficulty in meeting the 15% margin money requirement for poor borrowers.
• Lack of hand-holding support after the loan is sanctioned.
• Banks' hesitancy in providing large-scale unsecured loans to marginalized groups.

Reforms & Recommendations

• Increase the subsidy component for the most backward districts.
• Integration with e-commerce platforms (like ONDC) for market access.
• Extend the repayment period for capital-intensive greenfield projects.

Performance Statistics

SDG Linkages

Constitutional Backing

Technology Used

Success Stories

Key Takeaways

• Bank loans between ₹10 lakh and ₹1 crore.
• At least one SC/ST borrower and one woman borrower per bank branch.
• Repayment period of 7 years with a maximum moratorium of 18 months.
• Margin money requirement reduced to 15% (can be further reduced via state subsidies).

Convergence Schemes

• Pradhan Mantri Mudra Yojana (PMMY)
• Credit Guarantee Fund Scheme for Stand-Up India (CGSSI)
• National SC-ST Hub

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