The Stand Up India scheme is a great initiative launched by the Department of Financial Services of the Ministry of Finance, India. Counted among the MSME government schemes, it provides substantial benefits, such as loans and entrepreneurial counseling, to SC/STs and, in particular, women in India. Adopted on 5th April 2016, the scheme aims to lend a helping hand to women and other lower castes by equipping them with greenfield-level business knowledge.
Besides providing a loan as backup, the Stand Up India scheme ensures that Women set up a basic-level business, making full use of the provided facilities to gain independent financial freedom. For women entrepreneurs who have always dreamed of standing on their own two feet, the scheme is a game-changer.
Key Features of the Stand Up India Scheme
Let us look at the key features the MSME government scheme aims to provide:
1. The Stand Up India Scheme Provides Loans from All Scheduled Commercial Banks
Each bank provides at least one loan to SC/ST borrowers and one to a woman borrower, ensuring that the scheme is accessible to all the marginalised sections. However, this loan is only provided to beginner-level entrepreneurs.
2. Loans Ranging from ₹10 Lakh to ₹1 Crore are Provided Under This Scheme
The minimum working capital of ₹10 Lakh is provided as an overdraft, and a cash credit facility is available for a higher amount. The scheme offers a sufficient loan to establish a medium-scale business. Only one loan is provided per borrower, and the borrower should not be a defaulter with any bank.
3. Stand Up India Loans Offer a Repayment Term of Seven Years, with a Moratorium Period of 18 months.
The scheme provides a composite loan which includes both a term loan and working capital. The borrower must contribute 10% of the project, and a 15% margin can be covered by government-funded schemes based on eligibility; the loan finances the rest. This ensures that the borrower holds some stake in the business.
4. The interest rate charged is the lowest in the category.
The maximum cap provided by the scheme is Base Rate/MCR + 3% + Maturity/Tenure Premium, preventing banks from charging high interest rates. The Stand Up India scheme is especially designed to provide lower rates to a less catered part of Indian society.
Eligibility Criteria
Here’s the eligibility criteria for availing the Stand Up India scheme:
- The borrower profile should be a woman or a person from the Scheduled Caste or the Scheduled Tribe.
- The applicant must be 18 years of age or older.
- Only Greenfield ventures are supported by the scheme, meaning the applicant must be a first-time business owner in the manufacturing, trading, servicing, or agri-allied sectors.
- The applicant must not be a previous defaulter.
- For partnerships or companies, a minimum of 51% of the shareholder stake must be held by the applicant.
Stand Up India Scheme: Why is it essential?
The Stand Up India scheme has provided women and SC/STs with the benefit of easy loans, along with essential support for setting up their businesses. The scheme is not strengthening existing businesses but is establishing new ones, thereby expanding India’s economic base.
- The Stand Up India Scheme focuses on marginalised sections of the Indian Society, providing sufficient funds and opportunities to grow a successful greenfield business from scratch.
- It offers a high loan range to its borrowers, up to ₹1 crore, which helps businesses scale up on a larger scale. The borrowers do not have to be confined to only smaller ventures but can aim higher.
- The Stand Up India Scheme goes beyond providing credit to also offer guidance, digital facilitation, and skill development.
- The Stand Up India Scheme has a proven record of providing successful loans to over 1.8 lakh accounts.
- It has facilitated the creation of jobs and helped set up businesses for Women and other sections of society.
How to Avail the Stand Up India Scheme Loan?
JanSamarth, a government-funded portal, makes it easy for consumers to apply for various loans, including the Stand Up India scheme loan. The best part is that even the Stand Up India loan can be easily applied for online through the portal.
It is a simple process where, firstly, the portal checks your loan eligibility through a few questions. Secondly, you can apply online with the required documents and undergo digital verification. Lastly, your loan will be approved by the bank, and you can track the real-time status of your application.
This portal will provide you with guidance, starting from establishing the business, filling out the loan application, and obtaining the required training.
Stand Up India Scheme: Empowering Women
Traditionally, in Indian society, many women had limited access to financial stability. They relied on their male dependents and had access to only smaller loans. With the launch of the stand-up scheme, women gain access to high-credit loans, as well as knowledge on establishing a business in the competitive market.
The scheme presents a great opportunity to support individuals from underprivileged sections of society. For a woman, the Stand Up scheme is a pillar of support for setting up successful business ventures, and banks like HDFC ensure it’s done in a hassle-free manner.