Stand Up India Scheme
Background and Purpose
- Launched in 2016, this is a Central Sector Scheme (fully funded and managed by the Central Government).
- Purpose: To promote entrepreneurship at the grassroots level, with a focus on SCs, STs, and women entrepreneurs.
- The scheme’s philosophy is simple: instead of only giving jobs, help people create jobs by setting up their own businesses.
Key Objective
- To facilitate bank loans between ₹10 lakh and ₹1 crore to:
- At least one SC or ST borrower, and
- At least one-woman borrower per bank branch.
- The loan is specifically for establishing a Greenfield Enterprise → i.e., a business unit being set up for the first time in manufacturing, services, trading, or allied agriculture activities.
Eligibility Criteria
- Applicant must be SC, ST, or a woman above 18 years of age.
- Loan available only for Greenfield projects.
- In case of non-individual enterprises (like partnership firms or companies), at least 51% stake should be held by an SC, ST, or woman entrepreneur.
- The borrower should not be in default with any bank/financial institution.
Salient Features
(i) Loan Coverage and Security
- Collateral-free loans are encouraged.
- For this, the government has set up a Credit Guarantee Fund for Stand-Up India (CGFSI).
- Loans are given by all Scheduled Commercial Bank branches, as per commercial viability.
- Security: May include primary security, collateral security, or guarantee of CGFSI.
(ii) Interest Rate and Repayment
- Rate of Interest (RoI): Lowest applicable rate of the bank, but not exceeding
- Bank’s MCLR (base rate) + 3% + tenor premium.
- Repayment: Maximum of 7 years, with up to 18 months moratorium (holiday period before repayment starts).
(iii) Handholding and Support
- Recognizing that many first-time entrepreneurs need guidance, the scheme provides handholding support.
- SIDBI and NABARD offices act as Stand-Up Connect Centres (SUCCs) to help borrowers with training, skill development, and guidance.
(iv) Convergence with Other Schemes
- The scheme also allows convergence with other Central/State Government schemes, so that entrepreneurs can access multiple benefits together (such as subsidies, skill training, and tax benefits).
Refinancing Mechanism
- SIDBI (Small Industries Development Bank of India) acts as the refinancing agency to support banks in lending.
Significance
- The scheme is inclusive because it directly targets groups that often face difficulty accessing formal credit (SCs, STs, and women).
- By ensuring at least one loan per bank branch, it spreads entrepreneurship opportunities across the country, even in smaller towns and villages.
✅ In summary:
The Stand-Up India Scheme is not just about giving loans—it is about building entrepreneurial confidence among disadvantaged groups. By combining credit (loans) with handholding (guidance) and convergence (linking with other schemes), it promotes self-employment, social empowerment, and job creation.