Stand Up India Loan Scheme

The Stand Up India Scheme, launched by Prime Minister Narendra Modi in April 2016, aims to support women and SC/ST entrepreneurs in India by providing bank loans ranging from Rs. 10 lakh to Rs. 1 crore for setting up greenfield businesses. The scheme targets at least one woman and one SC/ST borrower per bank branch. The loan can be used for ventures in services, manufacturing, or trade. In group enterprises, at least 51% of the controlling stake must be held by women or SC/ST entrepreneurs. The scheme is available at all Scheduled Commercial bank branches.

Features of Stand Up India Loan Scheme

1. Nature of loan - The loan provided under this scheme is a composite loan which includes a term loan and the working capital.
2. Availability of Scheme - This scheme will be provided by all Scheduled commercial bank branches and can be accessed either directly at the bank branch, via SIDBI's Stand Up India portal or via the Lead District Manager.
3. Quantum of loan - The loans provided under this scheme will range between the amounts of Rs 10 lakh and up to Rs 1 crore. the composite loan amount will cover 75% of the cost of the project.
4. This includes the amount of working capital and the term loan. However, the condition that the loan shall cover 75% of the cost of the project will not be applicable in case the contribution of the borrower, along with financial support being provided from any other scheme amounts to more than 25% of the overall cost of the project.

1. Purpose of loan - The loan will be provided to any woman, SC or ST entrepreneur who is undertaking a venture for the first time under the services, trading or manufacturing sector.
2. Rate of Interest - The Stand Up India scheme interest rate shall be the lowest interest rates which are offered by the bank for the particular category. The interest rate however must not exceed the Tenor premium + 3% + MCLR.
3. Security for loan - In addition to primary security, the loan may require the applicant to provide collateral security or a guarantee of CGFSIL (Credit Guarantee Fund Scheme for Stand Up India Loans), as is required by the bank.
4. Repayment of loan - The maximum tenure allowed for repayment of loans taken under this scheme is 7 years, along with a moratorium period of 18 months.
5. Working Capital - For the purpose of drawing working capital up to an amount of Rs 10 lakh, the funds will be sanctioned in the form of overdrafts. A RuPay debit card can also be issued to the borrower for added convenience of withdrawing funds easily. If the working capital required is above Rs. 10 lakh, the same will be provided by cash credit limit.
6. Margin Money - While this scheme operates under the assumption that 25% of the margin money for the project will be provided by other state/central government schemes which provide subsidies, the loan applicant is expected to contribute a minimum of 10% of the cost of the project from their own funds.