Cabinet Approves Continuation of Stand-Up India Scheme for Five Years

The Union Cabinet, headed by PM Narendra Modi, has approved to extend the Stand Up India Scheme for 5 years till 31st March 2031. The scheme aims to encourage women, SCs and STs to become entrepreneurs and will provide financial assistance to an additional 2.5 lakh entrepreneurs. The cabinet has also approved the creation of a Credit Guarantee Corpus of INR 4,111 Crore. The scheme launched in April 2016 has so far facilitated loans to over 2.75 lakh women and SC/STs.

Stand-Up India Scheme Details

Particulars

Details

• Name of the Scheme: Stand-Up India
• Launched in: April 2016
• Extension Approved: 5 years
• Extended till: 31st March 2031
• Additional Assistance to: 2.5 lakh entrepreneurs
• Target Beneficiaries: Women, SC and ST entrepreneurs.
• Credit Guarantee Corpus: INR 4,111 Crore
• Loans Facilitated: Over 2.75 lakh
• Projects Eligible: Greenfield Projects
• Loan Amount: Above INR 10 Lakh up to INR 1 Crore
• Eligible Sectors: Manufacturing
• Services: Trading, Agri Allied Activities

Objectives of Stand-Up India Scheme

The scheme aims to encourage entrepreneurship among the traditionally unbanked.

Key Objectives include,

• Encourage women and SC/ST entrepreneurs to become entrepreneurs by starting new businesses.
• Facilitate bank loans for greenfield projects.
• Encourage entrepreneurship in Manufacturing, Services, Trading and Agri Allied sectors.
• Encourage greater access to formal finance.
• Encourage inclusive growth through entrepreneurship.

Loan Assistance

Eligible entrepreneurs will get loans of above INR 10 Lakh up to INR 1 Crore to start new ventures.

Loan can be provided in two forms,

• Composite Loan: This includes both Term Loan and Working Capital Requirements.
• Term Loan: This provides finance for eligible investment requirements.
• The loan will cover up to 85% of the cost of the project.

Loan Feature & Details

• Minimum Loan Amount: Above INR 10 Lakh
• Maximum Loan Amount: INR 1 Crore
• Project Coverage: Up to 85% of the project cost.
• Loan Type: Composite Loan or Term Loan.
• Credit Guarantee: 85% of the loan amount.
• Guarantee Fee: 0.50%.

Eligibility Criteria

The scheme is meant for women and SC/ST entrepreneurs to start new/greenfield businesses.

Key Eligibility Criteria include,

• Applicant must be a woman or belong to SC or ST category.
• Applicant must be aged 18+.
• Loan must be used for greenfield business.
• Applicant must not have defaulted with any bank or financial institution.

If not an individual, at least 51% of equity and control must be held by eligible SC/ST or Women entrepreneur.

Eligible Sectors

Loans can be used to start new greenfield businesses in the following sectors,

• Manufacturing
• Services
• Trading
• Agri Allied.

Credit Guarantee Corpus

The cabinet has approved the creation of a Credit Guarantee Corpus of INR 4,111 crore to provide credit guarantee coverage.

The scheme aims to provide risk coverage to lending institutions and enable eligible entrepreneurs to have access to bank finance.

The approved scheme will provide,

• 85% of the loan amount will be covered under credit guarantee.
• Standard Guarantee Fee of 0.50%.
• This will help to improve lending to entrepreneurs who might struggle with access to finance.

Achievements & Benefits

Since launching in April 2016 the scheme has facilitated loans to over 2.75 lakh women and SC/ST entrepreneurs.

By extending the scheme until March 2031 it aims to provide financial assistance to an additional 2.5 lakh entrepreneurs.

Benefits include,

• Increased access to institutional finance for women and SC/STs.
• New businesses created in Manufacturing, Services, Trading and Agri Allied.
• More inclusion for unbanked communities.
• Support for business development and inclusive growth.