Understanding everything about Stand Up India Scheme in 5 mins

The India government has been launching several schemes over the past few years to support entrepreneurship and make people Atma Nirbhar or self-reliant. The Stand Up scheme, however, is unique since it aims to promote the entrepreneurial spirit among the SC/ST communities and women. Till now, a record number of 1,16,266 loans amounting to Rs 26204.49 crore has been disbursed under the scheme since it was started in 2016.
Let us understand all about the scheme in detail.
 

What is the Stand Up India Scheme?

Stand Up India was launched to help support entrepreneurship among women and people belonging to Scheduled Castes (SC) and Scheduled Tribes (ST). Through this scheme the government intends to create an ecosystem that is conducive for doing business and shrink the discrimination and biases that women and SC/ST communities face during the establishment and working of their enterprises.
 
The main areas in which Stand Up India scheme works are:

• Ensuring more and more loans are disbursed through the Scheduled Commercial Banks in the districts to potential borrowers.
• Looking after and facilitating the loan requests made through the Stand Up Mitra portal.
• Making sure there is full transparency maintained in the process of loan disbursement and implementation of the scheme.
• Holding events to create awareness about how the loan should be utilised.

 

Eligibility for Stand up India Scheme

 

1. The borrower should be a woman or any person belonging to the SC/ST community above the age of 18.
2. The borrower should not be a defaulter.
3. The loan can be only used for first-time ventures (greenfield enterprise) in agriculture and allied sectors, service, manufacturing and trading sector.
4. In case, more than one person is involved in the business, either a woman or someone from SC/ST community should hold 51% of the shareholding or controlling stake.
    

Main Features of the Stand Up India Scheme

Following are the details of the scheme:

• Loan Size: Composite Loan (85% of the total project cost) that will cover term and working capital loan. 
• Amount: From Rs. 10 lakh to Rs. 1 crore
• Purpose: To promote women and minority communities to set up their own businesses.
• Interest Rate: Should be the lowest interest rate of the bank for the relevant category of business and should not exceed the Base Rate+3%+Tenor Premium
• Security: Primary security is compulsory. Depending on the financial institution, collateral security or Credit Guarantee Fund Scheme’s guarantee for Stand Up India loans are required.
• Minimum Age Criteria: 18 years
• Delivery: Available at all scheduled commercial financial institutions
• Repayment: The loan should be repaid in 7 years. The maximum moratorium period is 18 months.
• Working Capital: Upto Rs. 10 lakh can be withdrawn in overdraft. Any amount more than Rs. 10 lakh can only be sanctioned by Cash Credit Limit.
• Margin Money: With central/state schemes, a margin of up to 15% can be extended. However, the borrower will also have to contribute 10% of the total cost.

Also Read: Government Schemes for Women Entrepreneurs in India

What are the benefits of Stand Up India scheme

Getting a business loan approved is a long process, especially for first time loan applicants and those staying in non-urban and rural areas. Getting a business loan at low-interest rates requires a stellar credit score and profile. You also have to fulfil several criteria to be eligible for business loans. This is where the Stand Up India Scheme can help. In line with the vision to make India and Indians self-sufficient and independent, the Stand Up Scheme was launched. It was initiated keeping the minority people in mind and thus has several benefits. Here are some of them.
 

• To help set up their businesses at ease, the financial institutions offer their minimum interest rate.
• The moratorium period is long.
• You can receive up to 75% of the total cost of your project.
• The security requirements are minimal.

 

Ready borrower and Trainee borrower

The Stand Up India Scheme portal divides its visitors and potential applicants into the category of Ready Borrower and Trainee Borrower. This is done based on the answers to some questions that the user has to enter.
 

• Ready Borrower: When the applicant does not need any assistance, they can choose to register as a ready borrower. Choosing this option will initiate the application at the preferred financial institution.

• Trainee Borrower: When the borrower requires handholding support, they can choose to register as a trainee borrower. In such a case, the borrower will be provided necessary support whenever they need it.

This feature ensures that even eligible people with no experience in business can begin their enterprise with the help of experts.            

Also Read: A Complete Guide to Small Business Financing

Documents Required for Stand Up India Loan

The documents required for applying for Stand Up India Loan are as follows-

1. Application form with a passport-sized photo
2. Identity Proof (PAN card, aadhar card, Driving Licence, passport)
3. Proof of Residence (property tax receipt, utility bills like electricity or water bill, passport)
4. Proof of Business Address
5. In the case of a partnership, the partnership deed is required.
6. In the case of a company, MOA and AOA of the company are required.
7. Copies of Rent Agreement
8. Assets and liabilities statements of the guarantors and promoters
9. Projected balance sheets for the next 2 years
10. Title/lease deeds of primary and collateral security
11. Income tax returns
12. Documents to verify the caste of the applicant(s), whenever applicable
13. Certificate of Incorporation to ensure the majority stakeholder is a woman or a person from the SC/ST community, whenever applicable.
14. Any other documents required by the financial institution
15. For loans above Rs. 25 lakhs, additional documents are required.

 

How to Apply for Stand Up India Loan Scheme?

Follow the below steps to register with the Stand Up India Loan Scheme:

1. Visit the official website of Stand Up India.
2. Register at the portal using your name, phone number, and email ID.
3. Fill out the registration form.
4. Select the category, which makes you eligible for the scheme (if the primary applicant is a woman or from SC/ST community)
5. Fill in the details related to your business and choose first-time entrepreneurs.
6. Select the support you need and fill in the rest of the details.
7. Click on register.

 

Conclusion

The positive impact of the Stand Up India ecosystem can be gauged from the fact that a total of 1,16,266 loans amounting to Rs 26,204.49 crore has been disbursed under the scheme since its inception. The scheme has led to greater awareness about financial support for business ventures in the remote corners of India, helping several women as well as SC/ST community members realise their entrepreneurship dream. Seeing the successful entrepreneurship stories coming from various districts of India, the government has finally announced the extension of Stand up India scheme till 2025.