Stand Up India Scheme is a centrally sponsored program launched on 5th April 2016 to promote entrepreneurship amongst marginalized communities especially women, Scheduled Castes (SCs), and Scheduled Tribes (STs).
The scheme helps these communities in starting a greenfield enterprise in manufacturing, services, or the trading sector and activities allied to agriculture.
The scheme is based on recognition of the challenges faced by SC, ST, and women entrepreneurs in setting up enterprises, obtaining loans and other support needed from time to time for succeeding in business.
It seeks to give access to loans from bank branches to borrowers to help them set up their own enterprises.
Stand-Up India Scheme endeavors to create an eco-system that facilitates and continues to provide a supportive environment for doing business.
The scheme covers all branches of Scheduled Commercial Banks and will be accessed in three potential ways:
- Directly at the branch or,
- Through Stand-Up India Portal or,
- Through the Lead District Manager (LDM).
In 2019-20, the scheme was extended for the entire period coinciding with the 15th Finance Commission period of 2020-25.
As India celebrates the sixth anniversary of the Stand Up India Scheme, let us take a closer look at the features and achievements of this Scheme.
Purpose of Stand-Up India Scheme
The purpose of Stand-Up India is to:
- Promote entrepreneurship amongst women, SC & ST category;
- Provide loans for greenfield enterprises in manufacturing, services, or the trading sector and activities allied to agriculture;
- Facilitate bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one woman borrower per bank branch of Scheduled Commercial Banks.
Who all are eligible for a Loan?
The following category of people is eligible for loans under the standup India scheme.
- SC/ST and/or women entrepreneurs, above 18 years of age;
- Loans under the scheme are available for only greenfield projects. Greenfield signifies; in this context, the first time venture of the beneficiary in manufacturing, services, or the trading sector and activities allied to agriculture;
- In the case of non-individual enterprises, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur;
- Borrowers should not be in default to any bank/financial institution;
- The Scheme envisages ‘up to 15%’ margin money which can be provided in convergence with eligible Central/State schemes. While such schemes can be drawn upon for availing admissible subsidies or for meeting margin money requirements, in all cases, the borrower shall be required to bring in a minimum of 10 % of the project cost as their own contribution.
Handholding Support
Apart from linking prospective borrowers to banks for loans, the online portal developed by Small Industries Development Bank of India (SIDBI) for the Stand Up India Scheme is also providing guidance to prospective entrepreneurs in their endeavor to set up business enterprises, starting from training to filling up loan applications, as per bank requirements.
Through a network of more than 8,000 Hand Holding Agencies, this portal facilitates step-by-step guidance for connecting prospective borrowers to various agencies with specific expertise viz. Skilling Centres, Mentorship support, Entrepreneurship Development Program Centres, District Industries Centre, together with addresses and contact numbers.
Changes to Stand Up India Scheme
Pursuant to an announcement by the Union Finance Minister in the Budget speech FY 2021-22, the following changes have been made to the Stand Up India Scheme:-
- The extent of margin money to be brought by the borrower has been reduced from ‘up to 25%’ to ‘up to 15%’ of the project cost. However, the borrower will continue to contribute at least 10% of the project cost as their own contribution;
- Loans for enterprises in ‘Activities allied to agriculture’ e.g. pisciculture, beekeeping, poultry, livestock, rearing, grading, sorting, aggregation agro industries, diary, fishery, agriclinic and agribusiness centers, food, and agro-processing, etc. (excluding crop loans, land improvement such as canals, irrigation, wells) and services supporting these, shall be eligible for coverage under the Scheme.
To extend collateral-free coverage, the Government of India has set up the Credit Guarantee Fund for Stand Up India (CGFSI).
Apart from providing credit facility, Stand Up India Scheme also envisages extending handholding support to the potential borrowers.
It also provides for convergence with Central/State Government schemes. Applications under the scheme can also be made online at the Stand-up Mitra portal.
Achievements of Stand-up India Scheme
As of 21 March 2022, 03.2022 Rs. 30160 crores have been sanctioned under Stand Up India Scheme to over 133995 accounts all over India.
As India is growing rapidly, hopes, aspirations, and expectations of a large group of potential entrepreneurs, particularly women and Scheduled Castes (SCs), and Scheduled Tribes (STs) are rising.
They want to set up an enterprise of their own to allow themselves to thrive and grow. Such entrepreneurs are spread across the country and are bubbling with ideas on what they can do for themselves and their families.
The scheme envisages facilitating the dreams of aspiring SC, ST, and women entrepreneurs to reality by supporting their energy and enthusiasm and removing many hurdles from their path.