The Department of Financial Services, Ministry of Finance launched the Stand Up India Scheme on 5th April 2016 to provide financial assistance to Scheduled Caste (SC), Scheduled Tribe (ST), and women entrepreneurs.
The objective behind proposing the scheme was to create a greenfield enterprise in the manufacturing, services or trading sector by facilitating loans having a value between INR 10 lakh to INR 1 crore from Scheduled Commercial Banks (SCBs) to at least one SC/ST borrower and one woman borrower per bank branch.
Stand Up India Scheme Eligibility
Before applying for the Stand Up India Scheme, the applicants must fulfil the following eligibility criteria.
- Applicants must be a citizen of India.
- Applicants must be at least 18 years of age.
- Applicants must be SC/ST and/or a woman entrepreneur.
- For non-individual enterprises to avail of the loan, at least 51% of the shareholding stakes must be held by an SC, ST or a woman entrepreneur.
- The loan must be borrowed only for greenfield enterprises.
- The applicant should not be a defaulter with any lending institution.
Stand Up India Scheme Features
The table below discusses some of the essential features of the Stand Up India Scheme.
|Nature of Loan||Composite loan (consisting of Term Loan and Working Capital)|
|Maximum and Minimum Loan Amount||INR 10 Lakh to INR 1 Crore|
|Size of Loan||85% of the project cost. |
The condition of the loan to cover 85% of the project cost will not apply if the borrower’s contribution and the convergence support from any other schemes exceeds 15% of the project cost.
|Rate of Interest||The rate of interest charged by any SCBs would be the lowest applicable rate of the bank for that category and would not exceed the base rate (MCLR) + 3% + tenor premium.|
|Security||Apart from the primary security, the loan may be secured by collateral security or Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as per the bank.|
|Repayment Period||7 years|
|Moratorium Period||18 months|
|Margin Money||The scheme anticipates up to 15% margin money which the bank can provide in convergence with eligible Central/State schemes. Borrowers can avail such schemes for drawing admissible subsidies or meeting margin money requirements. However, in all cases, the borrower must self-contribute a minimum of 10% of the project cost.|
|Working Capital||Working capital of up to INR 10 lakh can be sanctioned by overdraft. Working capital of above INR 10 lakh can be sanctioned as a cash credit limit.|
Documents Required for Stand Up India Loan
The documents required to apply for the Stand Up India Loan are mentioned below.
- Application form
- KYC documents: Passport, PAN card, Aadhar card, Voter’s ID card, Driving Licence, Electricity bills, Telephone bills or Water bills, Signature identification from present bankers of the proprietor, partner of director (if a company)
- Proof of business address
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Partnership Deed
- Assets and Liabilities statement and Income Tax Return statement of promoters and guarantors
- Rent Agreement (in case of the business premises are on rent)
- SSI/MSME Registration Certificate (if applicable)
- Projected Balance Sheets for the following two years in case of working capital limits and the loan tenor in case of term loan
- Photocopies of Lease Deeds or Title Deeds of all assets registered as primary and collateral securities
- SC/ST Category Certificate
- Certificate of Incorporation from ROC in case of non-individual enterprises to show 51% of the shareholding and the controlling stakes held by SC/ST/Woman entrepreneur
- Clearance Certificate from the pollution control board (if applicable)
Additional Documents Required for Enterprises Having Exposure above INR 25 Lakh
- Profile of the unit (including the names of promoters and directors of the company, the activities undertaken, addresses of all offices and plants, shareholding pattern etc.)
- The balance sheet of the last three years of the Associate/Group Companies (if applicable)
- Project report providing detail of the machinery to be acquired, financial and Labour details, etc. (in case term funding is required)
- Manufacturing process detail (if applicable)
How to Avail Stand Up India Loan?
Under the Stand Up India scheme, the borrowers are categorised as Ready Borrower and Trainee Borrower, based on which the application process differs.
- Ready Borrower
Borrowers who do not need handholding support from the Stand Up Connect Centres (NABARD/SIDBI) are called Ready Borrowers. To apply for the loan, the borrower needs to visit the official website of the Stand Up India scheme, register themselves under the category and provide all the required information.
Once the application is submitted successfully, an application number is generated, which must be noted to track the application status. The information provided will be cross verified by the concerned bank, Lead District Manager (LDM), and the linked offices of SIDBI/NABARD. Once the verification process, the loan will be approved and can be tracked through the portal.
- Trainee Borrower
Trainee Borrowers are the ones who need handholding support on various aspects from the Stand Up Connect Centres (NABARD/SIDBI). In that case, the borrower can apply for the loan from the official website of Stand Up India, Common Service Centres (CSCs) or from the selected bank.
Following the application, the LDM or the SIDBI/NABARD officers will connect with the borrower and arrange relevant training sessions. The LDM would continuously monitor the progress of the training, and once done, the loan application will be processed through the portal.
- Financial Training: Financial Literacy Centre
- Skill Training: Vocational Training Centres (VTPs) or Other Centres (OCs)
- Entrepreneurship Development Programme (EDPs): MSME Development Institutes (MSME DIs), District Industries Centres (DICs), Rural Self Employment Training Institutes (RSETIs)
- Work Shed: DICs
- Margin Money: State SC Finance Corporation, Women’s Development Centre, State Khadi and Village Industries Board (KVIB), etc
- Mentoring from Established Entrepreneurs: Dalit Indian Chamber of Commerce and Industry (DICCI), Women Entrepreneur Association, Trade Bodies, NGOs, etc
- Utility: Utility providers
- Detailed Project Report (DPR): Project profiles available with NABARD, SIDBI, and DICs
Benefits of Stand Up India Scheme
The Stand Up India connect centres provides various benefits to the borrowers, such as,
- Charges the lowest interest rate the bank can offer for the category
- Training opportunities and handholding support
- Minimal collateral required
- Extended repayment and moratorium period
- Less time is taken to process loans (provided the application is correctly filled)
- Up to INR 5 Lakh: 2 weeks
- INR 5 Lakh to INR 25 Lakh: 3 weeks
- Above INR 25 Lakh: 6 weeks
Stand Up India Scheme Overview
According to the data published on the official website of Stand Up India, the government has sanctioned a loan amount of INR 30052.62 crore to 133423 approved applications to date. Apart from 79 SIDBI and 503 NABARD offices, 24750 agencies are registered with the scheme to provide handholding support.
With the Stand Up India scheme, the Government of India (GoI) is trying to help the SC/ST and Women entrepreneurs build their dream enterprise. Not only financially, but the scheme also supports the entrepreneurs in garnishing various skills required to become successful.
Frequently Asked Questions
As per the Department of Financial Services, the Stand Up India Scheme has been extended up to 2025.
The interest rate for the Stand Up India loan varies from bank to bank. However, the banks offer the loan at the lowest applicable rate for the category, which doesn’t exceed the base rate (MCLR) + 3%+ tenor premium.
Stand Up India Connect Centres comprises the SIDBI and NABARD offices.