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
- Nature of loan - The loan provided under this scheme is a composite loan which includes a term loan and the working capital.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
Eligibility for Stand Up India Loan Scheme
In order to be eligible for obtaining a loan under the Stand Up India Loan scheme, an individual must comply with the following eligibility criteria:
- The individual must be above 18 years of age.
- The entrepreneur must either be a woman or belong to the SC or ST community.
- Loans will be provided under this scheme only for funding green field projects, which implies that the venture is the very first one ever being undertaken by the applicant under the trade, services or manufacturing sector.
- If the loan is being taken for a non-individual enterprise, then it is compulsory that a minimum of 51% of the shareholding / controlling stake be held by a woman, SC or ST entrepreneur.
- The loan applicant must not be an existing defaulter to any bank or financial organization.
How to Apply for Stand-Up India
By following the steps given below, you can easily apply for the scheme:
Step 1: Visit the official portal of StandUp India.
Step 2: Log in if you are an existing user or register yourself by filling in your name, e-mail ID, and mobile number.
Step 3: Click on ‘Generate OTP’ and fill in the application form with details such as business type, ownership, project cost, and proposed activity.
Step 4: Upload the required documents. The portal automatically checks whether your uploaded files meet the eligibility criteria or not.
Step 5: You need to select a bank branch from the Stand-Up India loan scheme list.
Step 6: Carefully review and submit the application online.
Step 7: The bank verifies your details, checks eligibility, and transfers the approved loan to your business account.
Factors Required to avail the Stand Up India loan Scheme
There are certain factors which will directly influence the availability/approval of loans under Stand Up India Scheme. These are:
- The borrower's location of place of residence.
- Which category they belong to -SC, SC or woman.
- Nature of business for which loan is required.
- Whether the planned business premises are available or not.
- Whether the borrower required any assistance to prepare their project plan.
- The amount that the borrower is investing from their own pocket towards the set-up of the business venture.
- Does the borrower require financial aid to raise the amount of margin money.
- Whether the borrower has any prior experience in handling a business.
FAQs on Stand Up India Loan Scheme
- What is the amount of loan that I can get under the Stand-Up India scheme?
Under this scheme, you can get loans from banks ranging from Rs.10 lakh to Rs.1 crore.
- What is a greenfield enterprise?
A greenfield enterprise is a completely new business that has not been set up before by the applicant.
- Can existing businesses apply under the Stand-Up India scheme?
No, this scheme is only for setting up new businesses.
- Can I apply online without visiting a bank?
Yes, you can apply online by visiting the official Stand-Up India portal. You need to fill out the application form and upload the required documents.
- Is there any age limit to get a loan under the Stand-Up India scheme?
Yes, the minimum age is 18 years, and there is no upper age limit specified.
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