Stand Up India Scheme

The Stand Up India Scheme, introduced by the government in 2015, aims to empower women as well as individuals from SCs and STs by fostering entrepreneurship. Through this initiative, eligible borrowers can access collateral-free loans of up to Rs. 1 crore, which they can utilize to establish new ventures in various sectors including manufacturing, services, and agri-allied fields.

Objectives

The Stand-Up India project aims to offer financial assistance to entrepreneurs from SC or ST backgrounds by providing bank loans ranging from 10 lakh to 1 Crore.
Each bank branch participating in the project must actively support at least one female entrepreneur in establishing a new business, whether in manufacturing, services, or trading sectors.
Enterprises that are not individually owned must have either an SC/ST entrepreneur or a female entrepreneur holding a minimum of 51 percent ownership and controlling interest.

Features

The Department of Financial Services, under the Ministry of Finance, is spearheading the Standup India scheme to promote entrepreneurial ventures.
Loans ranging from Rs 10 lakhs to Rs 1 crore, inclusive of working capital, are offered to establish new businesses.
Each bank branch is tasked with assisting, on average, two entrepreneurial ventures—one led by a woman entrepreneur and one by an SC/ST entrepreneur.
RuPay debit cards will be issued for credit withdrawals.
The scheme will complement existing initiatives across various departments.
The Small Industries Development Bank of India (SIDBI), along with the Dalit Indian Chamber of Commerce and Industry (DICCI) and other sector-specific institutes, will lead the Stand Up India initiative.
SIDBI and the National Bank of Agriculture and Rural Development (NABARD) will establish Stand Up Connect Centres. Banks will monitor borrowers’ credit history to ensure they use funds appropriately and not for personal gain.

Significance

SIDBI has set up a refinance window with an initial fund of Rs. 10,000 crore.
NCGTC will establish a corpus of Rs. 5,000 crore for credit guarantees.
Borrowers will receive pre-loan training covering loan facilitation, marketing, and other aspects.
We’ve developed a user-friendly web portal to help you register online and access support services easily.
The primary aim of this initiative is to enhance access to institutional credit for minority groups in the non-farm sector.
SIDBI will receive Rs. 10,000 crore for financial assistance.
The plan involves two phases: pre-loan and operational, with ongoing support provided.
A composite loan will include a margin money component of up to 25% to assist businesses in accessing credit.
We will train applicants in various areas such as online platforms, e-marketing, web entrepreneurship, factoring services, and registration.

Challenges

The below mentioned are some of the major challenges related to Stand Up India Scheme:

Many folks miss out on learning about the social and economic sides of Dalit and women entrepreneurship, which could really help them succeed.
It seems like the scheme is asking companies to be innovative, but the definition of innovation is up to whoever’s running the show. This might slow things down and leave out some really deserving ventures.
The requirement for a turnover of 25 crores is a big ask. Not many businesses run by women or SC/ST folks meet this mark.
Self-help groups have their own set of problems, like certain people taking over and calling the shots. The scheme doesn’t say how they’ll deal with these issues.
Getting access to banks can be tough, especially in rural areas. There are lots of reasons why, like not enough info, tech problems, and the fact that not everyone’s up to speed on digital banking, even with schemes like PMJDY.
The money on offer, from 10 lakhs to 1 crore, might not be enough for manufacturing businesses to really get going.
SC/ST folks and women often don’t have the same chances to learn about tech, find skilled workers, or understand their industry. Closing these gaps is key to making the scheme work.

Eligibility

This program supports entrepreneurs who are from the SC/ST communities or are women, as long as they are at least 18 years old.
This initiative offers loans specifically for new projects, which are known as greenfield projects, in various sectors such as manufacturing, services, trading, or agriculture.
Businesses that are not owned by individuals must ensure that SC/ST and/or women entrepreneurs hold a majority shareholding of at least 51%.
Applicants should have no outstanding debts with banks or financial institutions.
The program permits a margin money of up to 15%, which eligible Central/State schemes can supplement with additional funds.
However, borrowers must contribute at least 10% of the total project cost from their own resources.

Benefits

Stand Up India scheme boosts public morale by encouraging fresh entrepreneurs to tackle unemployment head-on.
Investors find a welcoming haven within the scheme, where they receive expert advice, time, and legal expertise.
New business owners get a helping hand during their crucial first two years, with ongoing consultancy support.
Borrowers breathe easier with a seven-year repayment plan, easing the burden of loan payback.
The scheme aims to bulldoze barriers in business, tackling legal and operational hurdles.
It champions employment generation and upliftment of Dalits, tribals, and women.
Stand Up India sparks synergy with other governmental drives like ‘Skill India‘ and ‘Make in India‘.
It plays a vital role in preserving India’s demographic dividend and fostering financial and social inclusivity through bank access and technical know-how.