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Stand Up India Scheme

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Stand Up India Scheme

Overview:

Among the many initiatives launched by the Government of India in the recent past has been the unique Stand Up India Scheme aimed at boosting the entrepreneurial capabilities of the not so privileged which covers the SC/St and women. This flagship endeavour of the Government launched in April 2016 is anchored by the DFS (Department of Financial Services) under the overall supervision of the Ministry of Finance. It is typically designed to facilitate Stand Up India Loan to the eligible entrepreneurs who qualify for assistance from the banks and NBFCs. A detailed study to learn the Stand Up India scheme details and the features of the loan shall be able to draw a clear picture of the scheme in general and also its relation with Startup India Scheme launched a few months earlier with more generalised goals to help grow entrepreneurship and greenfield projects in India.

Features of Stand Up India:

It is interesting to note that both the Stand Up India and Startup India are similar to the extent being enablers and beneficiaries of the other landmark schemes of the Government of India like Make in India, Bharatmala and Sagarmala to name a few. However, Stand Up India is dedicated to the uplift of the Scheduled Caste and Tribe (SC/ST) community as well as Women entrepreneurs who have faced bias and challenges in their business ventures. To remove this deficiency in the eco-system within the country, the scheme was launched with a very broad spectrum. The salient features of Stand Up India Scheme are:

  • Objective: It is aimed to remove and acknowledge the challenges faced by members of the SC / ST community and women entrepreneurs by providing loans to build greenfield projects comprising of services, manufacturing or trade.
  • Amount of Loan: The loans are designed to be in the range of Rs.10 lakhs to Rs.1 crore at the maximum. However, the cap of finance of 75% shall not apply if there is a contribution by the borrower greater than 25%.
  • Holding Pattern: In the case of group enterprise, a minimum of 51% stake and shareholding must belong to a woman entrepreneur or a member of the SC / ST community.
  • Nature of Stand Up India Loan Scheme: It is in the form of a composite loan which includes term loan and working capital loan.
  • Loan Delivery: The loan will be extended by all scheduled commercial banks and some NBFCs with loans designed in the pattern of the scheme via SIDBI’s Stand Up India portal or the Lead District Manager.
  • Security: At the discretion of the bank the primary security will be additionally reinforced by the provision of collateral or Stand Up India Scheme subsidy in the form a guarantee from the Credit Guarantee Fund Scheme for Stand Up India Loans (CGFSIL).
  • Repayment: The repayment terms of the loan under Stand Up India is very liberal, extending up to a maximum of 7 years inclusive of a moratorium of 18 months.
  • Working Capital Finance: Up to Rs.10 lakhs can be drawn in the form of Overdraft. But if the need is higher, then the facility has to be converted into a Cash Credit facility with an appropriate limit.
  • Margin Money: It is expected that the State / Central Government will provide Stand Up India Scheme Subsidy to the tune of 25%, it is also expected that the promoter of the project will cough up 10% of the overall cost.
  • Indicative Figures: Some of the important statistics of Stand Up India as on 30 June 2019.

Total Registrations

243720

Number active on the portal

Banks

103

Branches

133236

Online loan sanctioned

3457

Total applications sanctioned

Number

68930

Amount

Rs.15112 crores

Total loans disbursed

Number

53782

Amount

Rs.8275 crores

Stand Up India Scheme Eligibility:

The parameters defined to check if the applicant is eligible for availing a Stand Up India Loan contains the following:

  • The individual entrepreneur must be at least 18 years of age.
  • The applicant must mandatorily be a woman or a member of the SC/CT community.
  • Venture under this scheme must be a green field in nature, that too in the type of business specified.
  • The applicant must not be a defaulter to any financial institution or a bank in the past.
  • The further parameters that shall impact the availability of Stand Up India Loan are:
  • The location of the business and the residence of the borrower.
  • The category of the promoter, whether SC/ST or a woman.
  • Assistance for the preparation of the project plan.
  • The quantum of the self-investment in the business venture by the promoter borrower.
  • If the borrower needs any assistance to raise the margin money.
  • Prior experience of the borrower in handling such a business.

Documents Required for Stand Up India Loan:

The documentation process for availing of the loan under the scheme is a bit elaborate, and the requirements are as under:

  • Identity Proof: Any of the valid photo identity proof acceptable to the bank.
  • Address Proof: Any valid address proof document of the individual and the business firm.
  • Memorandum of Articles of the Association of the Company.
  • Partnership deed in the case of a partnership firm.
  • Copies of the lease deeds.
  • Copy of the Rent Agreement.
  • The last three balance sheet of the company.
  • Assets and Liability statements of both the borrower and the guarantor.

Stand Up India Loan Interest Rate:

The rate prescribed under the scheme shall be the lowest for the category which is again subject to a cap of MCLR + 3% + Tenor Premium.

Stand Up  India Registration:

The basic requirement for Stand Up India Loan Application is through the process of registration, which can be accomplished in a few steps as under.

  1. The first step is to visit the official portal of Stand Up India at https://www.standupmitra.in/Login/Register.’
  2. Enter the full details of the business location.
  3. Select the category between SC, ST, Woman, and whether the stake held is 51% or higher.
  4. Select the nature of the proposed business; the loan amount desired description of the business, the details of the premises etc.
  5. Populate the fields with the past business experience, including tenure.
  6. Select the need for hand-holding is required.
  7. Enter all the personal details sought, which include the name of the enterprise and the constitution.
  8. The last step is to select the register button to complete the process.

Once you have completed registration, you are eligible to initiate the Stand Up India Loan Application process with the respective financial institution for the officials to contact you for completing the Stand Up India Loan Process and requisite formalities.

The basic aim of Stand Up India is to work for the empowerment of the not so privileged component of the society who are victims of caste and gender bias. Accordingly, the schemes envisage promotion of economic development of these sections and help in the generation of employment. The digital platform is designed in such a way that the scheme benefits 2.5 lakh borrowers in the targeted SC / ST and women category through the delivery of loans by 1.25 lakh bank branches pan India. In addition to the facilitation of loans to the target audience, it also additionally provides hand-holding, guidance, mentoring and skill development for budding entrepreneurs.

Stand Up India Loan Application:

The process of registration also empowers you to submit the Stand-Up India loan apply online but also allows the benefit to check to Stand Up India loan status.

Lendingkart, being an NBFC has a similar scheme for woman entrepreneurs where the process is completely online. The difference lies in the fact that we grant loans to women without any collateral at competitive rates of interest and are integral to the aim of women empowerment.

Stand Up India Scheme FAQs:

1. What if the loan requirement is below the minimum loan amount under Stand Up India of Rs.10 lakh?

The Government of India has initiated the Mudra Scheme with three types of loan under Sishu, Kishore and Tarun for such an eventuality where the loan amount is in the range of Rs.50000 in the minimum and Rs.10 lakhs maximum.

2. How is Stand Up India Scheme different from Start-Up India Scheme?

While the former is restricted to facilitating loans by financial institutions from Rs.10 lakhs to Rs. 1 crore for greenfield projects promoted by SC / ST and women entrepreneurs, the latter aims to boost and support new or existing enterprises using innovative technology.

3. What are the salient features of the Start-Up India Scheme?

According to the DIPP, Ministry of Commerce, Government of India, the following will be considered to qualify under the scheme: • The enterprise is not more than five years old from the date of incorporation. • Its turnover in any financial year does not exceed Rs.25 crores. • It promotes innovative technology and new products.

4. What are the other benefits of Stand Up India?

Apart from the submission of Stand Up India loan scheme application form at the dedicated SIDBI portal for linking the prospective borrowers to the banks, it also provides for various services like hand holding support, skill development training, mentoring, generation of project reports, filing of applications, subsidies etc.

5. What is hand holding support?

Since the objective of the scheme is to promote green filed projects among the SC / ST and women entrepreneurs, the prospective borrowers may be in need for assistance to get initiated into the scheme smoothly. The assistance may be in the field of mentoring, skill development and matching the requirements of banks. Hand holding is the process by which the borrowers are connected to the respective agencies who equip the borrowers adequately to overcome the hurdles.