What is Stand Up India Scheme?

Stand Up India Scheme:

The Stand Up India scheme aims to promote female entrepreneurship at the grass root level for economic development and job creation. The scheme seeks to leverage the institutional credit structure to reach out to the Indian masses like schedule castes, schedule tribes and woman entrepreneurs for enabling them become contributing members as well as participate in the economic growth of India.

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What is Stand Up India Scheme?

The Stand Up India scheme is an initiative taken up by the Government of India, to encourage women/ SC/ ST categories take up business ventures. The main purpose of the scheme is to serve all kinds of business capital requirements for setting up Greenfield projects that belong to trading, manufacturing or service sectors. Prime Minister Narendra Modi had launched the Stand Up India initiative on 5^th April 2016.

The main objective of this scheme is to promote entrepreneurship among women, especially the SC and ST communities. Stand Up India Scheme facilitates bank loans ranging from Rs 10 Lakh to Rs 1 Crore to Scheduled Caste (SC) or Scheduled Tribe (ST) borrowers. The loans are granted to at least one woman borrower per bank branch. The scheme aims to empower every Indian citizen and promote woman entrepreneurship among the scheduled castes and scheduled tribes. The scheme aims to cover 2.5 Lakh young aspirant entrepreneurs from the marginalized communities.

Objectives of the Stand Up India Scheme:

The Stand Up India scheme was launched with the aim of encouraging woman entrepreneurs from all backgrounds and extend aid, so that they easily get access to bank credits through financial institutions. The Stand Up India scheme encompasses schedule caste and schedule tribes and woman entrepreneurs and encourages them start their own businesses which would not only benefit individuals, but also create employment opportunities for all.

The facility of bank loans between Rs 10 Lakh and Rs 1 Crore is provided to at least one SC/ST and woman entrepreneur willing to start their own businesses. These business entities may belong to sectors like trading, service or manufacturing units. Any applicant availing loans under the Stand Up India scheme, must be the owner of the business unit or should hold 51% stake in the enterprise.

Eligibility of Stand Up India Scheme:

There are some general eligibility criteria for availing business loans. However, an applicant applying for loans under the Stand Up India scheme must fulfil the following eligibility criteria:

• The applicant must be above 18 years of age.
• The applicant must be a woman or belong to the schedule caste or schedule tribe community to avail loan under this scheme.
• Loans will be provided under this scheme only to fund green field projects, which implies that the venture is the very first one ever being undertaken by the applicant under the trade, services or manufacturing sector.
• The applicant must not have a past record of loan default with any bank or financial organisation.
• If the loan is taken for a partnership business or an organisation that has more than one shareholder, then the individual availing the loan must have minimum of 51% of the shareholding/ controlling stake and must be a woman or belong to the SC/ST category.

Documents Required for Stand up India Scheme:

• Identity proof: voter ID card/ passport/ Driving License/ PAN card
• Residential proof: Utility bills / telecom bills/ property tax receipt/ passport or voter ID card of proprietor or partner or director.
• Business address proof.
• Rental agreement for businesses established on rental property.
• Clearance from pollution control board (not mandatory/ only for applicable projects).
• SSI/ MSME registration (if applicable).
• Partnership deed for partnership businesses.
• Assets and liability statement of the promoters and guarantors along with latest income tax returns.
• Lease deeds/ title deeds of all the properties being offered as primary and collateral securities.
• SC/ST Certificates for candidates belonging to the SC/ST category.
• Certificate of incorporation from Registrar Of Companies ROC, to establish if majority stake holding in the company is in the hands of a person who belongs to SC/ST/Female category.

Purpose of Loan:

The loan availed under the Stand Up India scheme is a composite loan that comprises the qualities of term loan and working capital requirements. The loan is specially designed to suit the needs of the SC/ ST/ woman borrowers, who are taking up business ventures for the first time.

Borrowers can avail loans between Rs 10 Lakh and Rs 100 Lakh under the scheme. The loan can be availed for the purpose of setting up businesses and new enterprises in manufacture, trading and service sector by SC/ ST/ woman entrepreneur.

Stand Up India Scheme Loan Interest Rates:

The quantum of loans provided under this scheme ranges from Rs 10 Lakh and up to Rs 1 Crore depending on the eligibility of the borrower and the size of the business unit. It’s a composite loan that covers 75% of the cost required to set up the business. The cost includes the amount of working capital required and the term loan. As the loan is crafted to suit first time entrepreneurs, the interest rate applied on the loan shall be the lowest interest rates which are offered by the bank for a particular category.

The rate of interest applicable must not exceed base rate + 3% + tenor premium. However, the condition that the loan covers 75% of the project cost is not 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

Stand Up India Scheme Loan Security:

The Stand Up India Scheme Loan requires the borrower to offer collateral security or a guarantee of CGFSIL (Credit Guarantee Fund Scheme for Stand Up India) along with the primary security as decided by the banks.

Stand Up India Scheme Loan Repayment:

The loan repayment can be made within a maximum time frame of 7 years along with a moratorium period of 18 months.

Stand Up India Scheme Loan Working Capital:

For the purpose of drawing working capital up to an amount of Rs 10 Lakh, 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. A processing fee of 0.20% of the loan amount along with GST is applicable.  If the working capital required is above Rs 10 Lakh, the same will be provided through cash credit limit. Margin money on composite loan would be up to 25% which shall be reduced through convergence with Central / State schemes.

How to Apply for Loans Under the Stand up India Scheme?

The loans under the Stand Up India scheme can be availed from any scheduled commercial bank. The banks are directed to offer stand up India loans to at least one woman borrower per branch. A SC/ ST/ woman entrepreneur willing to start a new enterprise can avail a bank loan under this scheme in the following ways:

• Through the offline method: By visiting any branch of any commercial bank and applying for the loan at the branch by attaching the application form along with necessary documents.
• Through the online method: The applicant can also apply for the stand up India loan by visiting the stand up India online portal. The applicant needs to fill the form online and upload the documents required and make a submission.
• With the help of the Lead District Manager (LDM): A list of state-wise LDMs are available on the stand up India portal along with the address of the LDM offices.

Main Factors for Availing Stand up India Loan Scheme:

• The borrower’s place of residence.
• The category to which they belong i.e. SC/ SC or woman.
• Nature of business for which the loan is required.
• Whether the planned business premises are available or not.
• Whether the borrower requires any help to prepare their business/ project plan.
• The amount of money the borrower is investing from his own end for setting up the business.
• Whether the borrower has any prior experience in handling a business.

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