Stand-Up India Loan Scheme: Features, Benefits, Interest Rate, Eligibility, Security, and Repayment

Learn about the stand-up scheme, its features, benefits, eligibility and registration process of the scheme.
Business Loan
APPLY
4 min read
17 February 2024

Stand-Up India is a government initiative that aims to promote entrepreneurship among the scheduled caste (SC), scheduled tribe (ST), and women communities in India. The scheme was launched by Prime Minister Narendra Modi on April 5, 2016. The objective is to facilitate bank loans between Rs. 10 lakh and Rs. 1 crore to at least one SC/ ST and one woman borrower per bank branch for setting up a Greenfield enterprise. The scheme also provides hand holding support, training, mentoring, and guidance to the potential entrepreneurs through a web portal called Stand-Up India Portal. If you are looking for financial assistance, you can explore the Mudra Loan for more options.

What is Stand-Up India scheme?

The scheme is implemented by the Department of financial services (DFS), Ministry of finance, Government of India. The Small Industries Development Bank of India (SIDBI) is the nodal agency for the scheme. For entrepreneurs in India, the Make in India Scheme offers additional support for industrial growth.

The scheme covers both manufacturing and service sector activities, including trading. The enterprises can be in the form of sole proprietorship, partnership, company, or cooperative society. The scheme also covers activities allied to agriculture.

Stand-up India Scheme

Specifications

Interest Rate

Bank’s MCLR + 3% + Tenor Premium

Repayment Tenure

Maximum 7 years with Moratorium Period up to 18 months

Minimum Age Criteria

18 years for SC/ST and Women Entrepreneurs

Loan Amount

Rs. 10 lakh – Rs. 1 crore

Loans Offered For

Only Green Field Projects (first-time ventures)

Shareholding or Controlling Stake

51% for Non-Individual Enterprises

Borrower’s Financial Repayment Status

Must not have defaulted to any bank or NBFC

Margin

Maximum 15%, can be offered with Central/State Schemes

Working Capital Limit

Up to Rs. 10 lakh in the form of Cash Credit limit

 

What is the Impact of the Stand Up India Scheme?

The Stand-Up India Scheme is a government initiative to support entrepreneurship among SC/ST and women in India. The scheme aims to provide bank loans of Rs. 10 lakh to Rs. 1 crore to at least one SC/ST and one-woman borrower per bank branch for setting up a new enterprise in manufacturing, services or trading sector. The scheme also offers handholding support, training, mentoring and Rupay debit cards to the borrowers. The impact of the scheme is to promote economic empowerment, social inclusion and job creation for the marginalised groups in India. Entrepreneurs can also benefit from understanding the Mudra Loan interest rate when considering their financing options.

Purpose of the Stand Up India Scheme Loan

The Stand Up India scheme aims to promote entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing them with access to credit. The scheme offers loans ranging from Rs. 10 lakh to Rs. 1 crore to set up greenfield enterprises in manufacturing, services, or trading sectors. By providing financial assistance and support, the scheme seeks to empower marginalised communities and promote economic growth through the creation of new businesses. Women entrepreneurs may also benefit from the Udyogini Scheme for additional financial support.

Objective of Stand Up India Scheme Loan

The Stand Up India scheme aims to facilitate bank loans between Rs. 10 lakh and Rs. 1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise. This scheme seeks to promote entrepreneurship among women and marginalized communities, thereby fostering economic growth, job creation, and inclusive development. Additionally, the PMFME Scheme helps with the development of micro food processing enterprises.

Stand-Up India Scheme - Nature of loan

The Stand-Up India Scheme offers term loans for greenfield projects, meaning it supports the establishment of new ventures in the manufacturing, services, or trading sectors. These loans are meant to be used for business purposes such as setting up new units, acquiring machinery, or financing working capital needs. The scheme aims to promote entrepreneurship and facilitate the growth of businesses owned by women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing access to credit on favourable terms.

Size of Stand Up India Scheme Loan

The Stand Up India scheme provides loans ranging from Rs. 10 lakh to Rs. 1 crore per borrowing unit. This loan is intended to facilitate the establishment of greenfield enterprises in the manufacturing, services, or trading sectors. The scheme aims to support entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing access to credit for starting new ventures and fostering economic development in these communities.

Features and benefits of the Stand-Up India scheme

Some of the key features and benefits of the Stand-Up India scheme are:

  • It provides a composite loan (inclusive of Term Loan and working capital) between Rs. 10 lakh and Rs. 1 crore to eligible borrowers for setting up a Greenfield enterprise.
  • The loan is repayable in 7 years with a maximum moratorium period of 18 months.
  • The loan is secured by collateral or guarantee of the credit guarantee fund scheme for Stand-Up India loans (CGFSIL).
  • The loan is available at the lowest applicable rate of the bank for that category (not exceeding MCLR + 3% + tenure premium).
  • The borrower is given a rupay debit card for convenience and ease of operation.
  • The borrower is also eligible for a subsidy under the differential rate of Interest (DRI) scheme, subject to certain conditions.
  • The borrower can avail hand holding support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, work shed/ utility support services, subsidy schemes etc.
  • The borrower can access the Stand Up India Portal for information, registration, application, and tracking of the loan status.

Stand-Up India scheme eligibility

The eligibility criteria for availing a loan under the Stand-Up India scheme are:

  •  Funding is available for Greenfield Enterprises.
  • If the applicant is male, he must belong to the SC/ST category.
  • The applicant must be at least 18 years old.
  • The applicant must not have any outstanding defaults with banks or financial institutions.

Stand-Up India loan interest rates

The interest rates for the loans under the Stand-Up India scheme are determined by the respective banks as per their internal policies. However, the interest rate cannot exceed the lowest applicable rate of the bank for that category (not exceeding MCLR + 3% + tenure premium). The interest rate may vary depending on the credit rating, risk profile, collateral security, and other factors.

As per the data available on the Stand-Up India Portal as on September 21, 2023, the average interest rate for loans sanctioned under the scheme was 9.67%.

Steps to Register for the Stand-Up India scheme

You can apply by visiting your nearest bank branch or contact the Lead District Manager (LDM) for your district. You can also apply directly through the portal by following the steps below:

  1. Visit the official portal.
  2. Fill in the full details of your business location.
  3. Choose between SC, ST, Woman, and indicate if you hold a 51% or higher stake.
  4. Provide the nature of the proposed business, desired loan amount, a description of the business, and details of the premises.
  5. Include your past business experience and tenure.
  6. State if you require hand-holding or additional support.
  7. Enter all requested personal information, including the enterprise name and its constitution.
  8. Click the "Register" button to finalise your registration.

Post registration, start the Stand Up India Loan application process with the relevant financial institution. Officials will reach out to you to complete the loan process and necessary formalities.

Documents required for the Stand-Up India scheme

The documents required for availing a loan under the Stand Up India scheme are:

  • Proof of identity: Voter’s ID Card, Passport, Driving License, PAN Card, or signature identification from the applicant’s current bankers (proprietor, partner, or director, if a company).
  • Proof of residence: Recent telephone or electricity bills, property tax receipt, Passport, or Voter’s ID Card of the proprietor, partner, or director (if a company).
  • Proof of business address: Documents validating the business address.
  • Non-default confirmation: Evidence that the applicant is not in default with any bank or financial institution.
  • Company documents: Memorandum and Articles of Association for companies or Partnership Deed for partnerships.
  • Financial statements: Assets and liabilities statement of promoters and guarantors, along with the latest income tax returns.
  • Rent agreement: If the business premises are rented, include the rent agreement and, if applicable, clearance from the pollution control board.
  • SSI/MSME registration: If applicable, provide the MSME registration certificate.
  • Projected financials: Balance sheets for the next two years for working capital limits or for the loan period for term loans.
  • Property documents: Photocopies of lease deeds or title deeds of all properties being offered as primary and collateral securities.
  • SC/ST category proof: Documents to confirm if the applicant belongs to the SC/ST category, if applicable.
  • Certificate of incorporation: From the Registrar of Companies (ROC) to verify if majority stakeholding is held by someone from SC/ST/Woman category.

For exposure above Rs. 25 lakh:

  • Unit profile: Includes names of promoters, other directors, business activities, addresses of all offices and plants, shareholding pattern, etc.
  • Financial statements of associate/group companies: Balance sheets for the last three years, if applicable.
  • Project report: For proposed projects requiring term funding, detailing machinery acquisition, suppliers, costs, production capacity, projected profits and losses, labor requirements, and other financial assumptions.
  • Manufacturing details: If applicable, include the manufacturing process, major executives, tie-ups, raw material details, suppliers, buyers, competitors, and the company’s comparative strengths and weaknesses.

Stand Up India Scheme: Challenges

While the Stand Up India Scheme aims to promote entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST), it faces several challenges. One key challenge is the lack of awareness about the scheme among the target beneficiaries, which hinders its uptake. Additionally, there may be challenges related to the availability of collateral and the complex application process, especially for first-time entrepreneurs. Moreover, ensuring the timely disbursal of loans and providing adequate support for business development are crucial for the scheme's success but can be challenging to implement effectively.

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Additional Read: Working Capital Management

Additional Read: Capital Budgeting

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Frequently asked questions

Who can apply for a loan under the Stand-Up India scheme?

Any SC/ ST or woman entrepreneur who wants to set up a Greenfield enterprise in manufacturing, services, trading, or agri-allied activities can apply for a loan under the Stand-Up India scheme. The enterprise should be a new one and not an existing one.

What is the difference between Stand-Up India and the start-up India scheme?

Stand-Up India is a scheme that aims to promote entrepreneurship among the SC, ST, and women communities. It facilitates bank loans between Rs. 10 lakh and Rs. 1 crore for setting up a Greenfield enterprise. The scheme also provides hand-holding support and subsidies to the borrowers.

Start-Up India is a scheme that aims to foster innovation and entrepreneurship among the youth. It provides tax benefits, patent support, funding support, incubation support and ease of doing business to the start-ups. The scheme covers both new and existing enterprises that are innovative, and have the potential to generate employment.

What is hand holding support in the context of the Stand Up India scheme?

Hand holding support is the assistance provided to the potential entrepreneurs by various agencies such as SIDBI, NABARD, NSIC, DICCI, COWE etc. The support includes training, skill development, mentoring, project report preparation, application filling, work shed/ utility support services, subsidy schemes etc. The support is available through online and offline modes.

Who started the Stand-Up India scheme?

The Stand-Up India scheme was started by the Government of India in 2016. It was focussed to promote entrepreneurship and facilitate bank loans to scheduled caste (SC) / scheduled tribe (ST) and women entrepreneurs in the country.

Is there any subsidy in Stand-Up India?

There is no subsidy in Stand-Up India, but the scheme offers concessional interest rates, collateral-free loans, and credit guarantee fund support to the eligible borrowers.

What are the benefits of Stand-Up India?

The benefits of Stand-Up India are:

  • It helps in creating employment opportunities and economic empowerment for the SC/ ST and women entrepreneurs.
  • It provides hand holding support, training, mentoring, and guidance to the borrowers through various agencies and platforms.
  • It enables the borrowers to access the online portal, stand-up mitra. On this they can apply for loans, track their application status, and get multiple loan offers from different banks.
  • It covers a wide range of sectors and activities, including manufacturing, services, trading, and agri-allied activities.
What is the difference between Stand-Up India and start-up India?

The point of Stand-Up India and start-up India is to foster a culture of innovation and entrepreneurship in the country and to support the growth of new and existing businesses. Stand-Up India focuses on the SC/ ST and women entrepreneurs, while start-up India targets the start-ups that have high potential for growth, innovation, and social impact. Both the schemes aim to provide easy access to finance, incentives, tax benefits, and regulatory support to the entrepreneurs.

What is the Stand-Up India scheme?

The Stand-Up India scheme is an initiative by the Government of India to support entrepreneurship among women and marginalised communities. The scheme provides loans ranging from Rs. 10 lakhs to Rs. 1 crore to eligible candidates who plan to set up greenfield enterprises or expand existing businesses. The scheme aims to promote entrepreneurship and employment opportunities and foster economic growth.

What is the PM Modi Stand-Up India scheme?

The Stand-Up India scheme is a government initiative aimed at supporting entrepreneurship among women and marginalised communities in India. It provides financial support in the form of loans ranging from Rs. 10 lakhs to Rs. 1 crore to eligible candidates interested in setting up new businesses or expanding their existing businesses. The scheme aims to promote entrepreneurship, provide employment opportunities, and foster economic growth in India.

Who is eligible for the Stand-Up India scheme?

The Stand-Up India scheme is available to women and entrepreneurs belonging to Scheduled Castes (SCs) or Scheduled Tribes (STs) categories. The scheme is available for greenfield projects in the non-farm sector, with loans ranging from Rs. 10 lakhs up to Rs. 1 crore. The borrower should hold at least 51% ownership of the business and have a workable project report.

What are the benefits of the Stand-Up India scheme?

The Stand-Up India scheme offers numerous benefits for eligible candidates, including financial assistance through loans, and low-interest rates. It also provides extensive support services to promote entrepreneurship, mentorship support, and credit guarantee mechanisms to support loan repayment.

What is the maximum amount for Stand-Up India scheme?

The maximum amount for the Stand-Up India scheme is between Rs. 10 lakh and Rs. 1 crore. This initiative aims to support first-time ventures, particularly by SC/ST and women entrepreneurs, with favourable interest rates and repayment tenures of up to 7 years.

Is there any subsidy in Stand-Up India?

Yes, Stand-Up India provides subsidies of up to 75% of actual expenditure, subject to a maximum of Rs. 75,000. These subsidies are designed to assist entrepreneurs, especially those from SC/ST and women categories, in funding their business ventures and fostering growth.

How many documents required for Stand-Up India loan?

To apply for a Stand-Up India loan, you need to submit the following documents:

  1. A filled application form with the latest passport-sized photographs.
  2. Identity proof: Driving licence, passport, Aadhaar card, Voter’s ID, or PAN Card.
  3. Residence Proof: Aadhaar card, PAN Card, electricity bill, or phone bill.
  4. Proof of business address.
  5. Deed of partnership (if available).
  6. Copies of the lease deed or rent agreement of the office space/ manufacturing unit.
  7. Any other document as per the requirements of the bank.
What is handholding support in the context of the Stand-Up India Scheme?

Handholding support in the Stand-Up India Scheme refers to the guidance and assistance provided to entrepreneurs, especially those from marginalised communities, to help them navigate the process of starting and managing their businesses effectively, ensuring their success and sustainability in the venture.

How can I apply for a loan under the Stand-Up India scheme?

You can apply for a loan under the Stand-Up India scheme through the online or offline route. To apply offline, visit the nearest bank branch, complete the application form, attach the required documents, and submit. Alternatively, online applications offer convenience, allowing you to complete the process from home.

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