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The government of India offers many subsidy and loan schemes to MSME owners. These are for various purposes and designed for MSMEs at various stages of their growth journeys. One such scheme is the Stand-Up India scheme – introduced by the government to promote entrepreneurship among scheduled caste (SC)/scheduled tribe (ST) and women entrepreneurs in India.
This article details the Stand-Up India scheme, its features and eligibility and also answers some frequently asked questions.
What is Stand-Up India scheme?
Stand-Up India is a loan scheme launched by the Government of India. The scheme provides financial assistance to SC/ST and women entrepreneurs. The loan is provided to a SC, ST or woman entrepreneur for setting up a greenfield business that conducts any activity including manufacturing, services, trading or agri-allied activities. The purpose of the scheme is to encourage SC, ST or women entrepreneurs and facilitate financial support.
Apart from the scheme, there are other government loan schemes for women entrepreneurs to encourage and support them to start and grow their business.
Features and benefits of Stand-Up India scheme
- The objective of Stand-Up India scheme: To promote greenfield businesses and encourage SC/ST and women entrepreneurs.
- Nature of loan: Facilitates composite loan (inclusive of term loan and working capital) between ₹10 lakh to ₹1 crore inclusive of working capital.
- Collateral: The loan under the Stand-Up India scheme can be provided without any collateral or security under the guarantee of Credit Guarantee Fund Scheme.
- Rate of interest: Borrowers are assured to get the best possible interest rate. It is usually fixed at the lending bank’s MCLR + 3% + tenor premium.
- Withdrawal working capital: The lending bank provides a RuPay card to the borrower for ease of withdrawing working capital.
- Margin money: The loan is provided for up to 75% of the project cost. The borrower needs to arrange for the remaining 25%. Out of which 15% can be arranged with the help of other MSME subsidy schemes. The borrower has to arrange for at least 10% of the cost by himself/herself.
Eligibility of Stand-Up India scheme
Listed below are the eligibility criteria to apply for and avail loans under the Stand-Up India scheme:
- The borrower has to be an SC/ST or woman entrepreneur.
- If the business is a non-individual enterprise, 51% of the shareholding and controlling stake should be owned by an SC/ST or woman entrepreneur.
- The minimum age of the borrower should 18 years.
- The enterprise has to be a greenfield project engaged in manufacturing, service, trading or agri-allied activities.
- The borrower should not be a defaulter or blacklisted.
Documents required for Stand-Up India scheme
Documents required for Stand-Up India scheme are similar to the list of documents required for an MSME loan. Here is a list of commonly required documents:
- Duly filled application form
- Passport-sized photographs
- Identity proof (Aadhaar card, passport, Voter’s ID, PAN card, etc.)
- Residence proof (Utility bills, Aadhaar card, passport, Voter’s ID)
- Business address proof
- Business registration proof
- Company’s balance sheet for the last 3 years
- Detailed project report
Note: The list of required documents is subject to change depending on the lending bank. Borrowers are encouraged to get the latest list of required documents from the bank.
Fact box: Success of Stand-Up India scheme
More than 1 lakh women entrepreneurs have availed of the loan under Stand-Up India scheme since its launch in 2016.
How to apply for Stand-Up India scheme?
There are three ways in which a borrower can apply for Stand-Up India scheme. These are mentioned below:
- Stand-Up India portal: You can visit the Stand-Up India portal i.e., StandUpMitra portal. You can register and log in to apply. The loan process is online.
- Banks: You can approach any branch of a scheduled commercial bank to get the application form and understand the process. It is an offline loan process and you will personally need to visit the branch. Some of the banks allow borrowers to download a copy of the application form which can be printed and filled in.
- Lead District Manager: You can also apply through Lead District Manager (LDM). The list of LDMs is provided on Stand-Up India’s portal.
Note: The portal also offers handholding support through its network of agencies. Any borrower registering through the Stand-Up India portal can seek help of a handholding centre.
Steps to apply through Stand-Up India portal
You can follow the steps mentioned below to apply through the StanUpMitra portal.
- You need to visit StanUpMitra (standupmitra.in) and register yourself. While registering, the portal will ask a few questions. Based on the responses, you will be classified either as a ‘Trainee borrower’ or a ‘Ready borrower’.
- In case you are classified as a Ready Borrower and require no handholding support, you can fill in the application form and select a bank. Once you fill in the application form, an application number will be given to you. Information about your application will be shared with the concerned bank, LDM or NABARD/SIDBI’s office. Stand-Up Connect Centres (SUCC) will be designated to your application, and it will be tracked online.
- In case you are classified as a Trainee Borrower and you wish to seek handholding support, depending on the type of help you need, you can coordinate with the Help Centres. Here is how:
- Search for the Stand-Up India Help Centre (SUHC) on the portal.
- Select a handholding agency.
- You can send a request to the portal directly or contact the SUHC with the help of contract information provided on the portal.
(Note: Although applying for loan under Stand-Up India scheme is free, the borrower needs to pay handholding charges to SUHC.)
- The borrower can change the SUHC if required after giving feedback on the portal.
- Once the services of the SUHC are complete, the borrower can mark the completion on the portal and provide feedback.
- Once the application is submitted the borrower can choose the bank for seeking Stand-Up India loan. Borrowers can choose three banks in order of preference.
- Documents required can be uploaded.
- The loan is approved if the documentation conforms to the bank’s regulations. In case of any missing or additional documents, borrower can directly be in touch with the bank.
- The borrower can follow up with the bank or SUCC or LDM.
What if my requirement is lower than ₹10 lakh?
Loans under the Stand-Up India scheme can be provided from ₹10 lakh to ₹1 crore. If your requirement is lower than the specified amount, you can choose to apply for a loan under other government schemes such as Mudra (PMMY) loan.
Can Stand-up loan scheme avail through any bank?
No. It can be availed through scheduled commercial banks. You can visit any branch of a nearby scheduled commercial bank to get the application form.
Is collateral required to seek a loan under Stand-Up India scheme?
It is not required for the borrower to promise any collateral. It is secured under the guarantee of Credit Guarantee Fund Scheme.