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Updated: 28-01-2025 at 6:32 AM
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Entrepreneurship has mostly been limited to the affluent sections of the society. The non access to finances was becoming a hurdle in the maximum utilisation of potential of the socially backward classes. The lack of empowerment of the women population of the country was another factor. After assessing these concerns, the government of India initiated the standup scheme.
The Stand-Up India (SUI) scheme is a government initiative aimed at promoting entrepreneurship amongst women, Scheduled Castes (SCs) and Scheduled Tribes (STs). The govt scheme is an initiative of the Department of Financial Services (DFS), Ministry of Finance, Government of India.
Standup-India Schemes | Specifications |
---|---|
Interest Rate | Bank’s MCLR + 3% + Tenor Premium |
Repayment Tenure | Maximum 7 years with a Moratorium Period of up to 18 months |
Minimum Age Criteria | 18 years for SC/ST and Women Entrepreneurs |
Loan Amount | Rs. 10 lakh – Rs. 1 crore |
Loans Offered For | Only Green Field Projects (first-time ventures) |
Shareholding or Controlling Stake | 51% For Non-Individual Enterprises |
Borrower Financial Repayment Status | Must have not been defaulted to any bank of NBFC |
Margin | A maximum of 15%, can be offered with Central/State Schemes |
Working Capital Limit | Up to Rs. 10 lakh in the form of Cash Credit limit |
The government scheme aims to provide government loan schemes from banks ranging between 10 lakhs to 1 crore to at least one woman and one member of the SCs or STs per bank branch. The scheme caters only to the setting-up of greenfield enterprises, implying enterprises that have been started from scratch, without any history. |
There can be two types of enterprises under the SUI scheme; individual and non-individual enterprises. The ownership stake, 51% of shares, in non-individual enterprises must be held by either a woman or a member of the SC or ST communities.
The rates of interest for Stand-Up India loans are given by every financial institution as per their standards. However, the interest rate cannot be exorbitant than the Bank’s MCLR plus 3% and tenure premium. It is possible that the rate can vary depending on such parameters as the credit score, risk assessment and security. On September 21, 2023, the average interest rate for these types of loans was 9.67%.
The following are the important features of the Stand-up India Scheme:-
Loan Amount: Devolved between ten lakh to one crore Indian rupees.
Eligible Borrowers: One SC/ST or woman (above 18 years) intending to begin an independent new business venture (greenfield).
For Non-Individual Businesses: At least 51% of the ownership of the company has to be owned by the SC/ST or female owners.
Non-Defaulter: The borrower should not have any bad records concerning the Loans with the Banks or other Financial institutions.
Business loans below ₹10 lakh for working capital requirement are given to start-up ventures provided it is in manufacturing or services or trading business not exceeding ₹1 crore. The scheme also targets the funding of business initiatives by women, SCs and STs to foster new economy business among these groups.
The SUI scheme has several benefits that have been enumerated below:
Financial Assistance: The main objective of the scheme is to extend financial assistance and provide loans between 10 lakhs to 1 crore rupees to the eligible beneficiaries.
Low Interest Rates: The interest rates are to be set at the lowest applicable rates for this particular category, set by that particular bank. The interest is not to exceed the base rate + 3% tenor premium.
Risk Reduction: The risk of losing personal investment is low due to the assistance covering 75% of the total cost of the project. This encourages the exploration of business opportunities.
Employment Opportunities: The setting up of enterprises will generate employment opportunities for the workforce, in turn, boosting the economy of India.
Promotion of Inclusivity: By limiting this scheme to select strata of society and gender, the govt scheme is promoting equity and equality. Social and entrepreneurial inclusion is being increased this way.
Hand-holding Support: The businesses are provided with training and support for the formulation of project reports and related activities.
Documents required for availing a loan under the Stand-Up India:-
Proof of Identity: Voter ID, Passport, Driving License, PAN Card or Bank Account statement/Signed copy of the Passbook along with photographs affixed thereon.
Proof of Residence: Any of the following documents: phone bill or the last electricity bill, the latest property tax receipt or copy of a current passport or voter identity card.
Business Address Proof: Other relevant papers such as the business address.
Non-Default Confirmation: Verification of non-payment of any bank or other type of financial organization to which you may have borrowed.
Company Documents: For companies: Memorandum and Articles of Association and for the Partnerships: Partnership Deed.
Financial Statements: Promoters and guarantors' balance sheet profit and loss account and latest income tax returns.
Rent Agreement: Where your business premises are rented include a rent agreement along with clearance from the pollution control board wherever needed.
MSME Registration: In case MSME registration has been done, then produce a certified copy of the registration certificate.
Projected Financials: Budgetary estimates for two years for working capital requirements or the term loan period as the case may be.
Property Documents: Lease or title deeds of the properties that were used as security in case of hiring a car, photocopy of them.
SC/ST Category Proof: If applicable the certificates related to the SC/ST status of the candidate as called by Indian laws.
Certificate of Incorporation: It should be endorsed by the Registrar of Companies to cross-check the majority ownership from SC/ST/Women.
Additional Documents Required for Loans Above ₹25 Lakh:
Unit Profile: This comprises; names of the promoters and directors, business activities of the firm, addresses of its offices and plants and shareholders part.
Financial Statements of Related Companies: B/S for the last three years of the associate or group companies if any in case of holding company.
Project Report: If the project requires term loans then it is mandatory to explain the machinery for the project, suppliers, cost, production capacity, gross and net target profit & loss, manpower required, and the allied financial considerations.
Manufacturing Details: Otherwise, it should be possible to identify the manufacturing process, major executives, affiliates, inputs, sources, customers, rivals, and opportunities and threats.
The eligibility criteria to apply for the SUI scheme are given below:
The borrower has to be an SC/ST or a woman, must be 18 years of age and above and must be a first-time entrepreneur.
Loan amount can start at ₹ 10 lakh and can go up to ₹ 1 crore for business-minded individuals.
At least 51% of the business has to be owned by the SC/ST persons or women.
It is also important not to have any loans with banks or any other related financial institutions.
The application process to avail benefits of the SUI scheme is as under:
Visit the official help website of the SUI scheme at Udyami Mitra.
Provide the location details of the project.
Select the category of application (SC/ST/women) and specify the controlling stake.
Provide other details such as the loan amount desired, business description, premises details, business experience and tenure.
Choose if you wish to avail hand-holding support.
Enter the personal details required, including the name of the enterprise and the constitution.
Click on the register button to complete the process.
Once the registration process is complete, you can start the loan process with the financial institution of your choice.
Thus, the Stand-Up India scheme is a strong weapon that aims at encouraging women, SCs and STs to start their businesses by providing them with necessary financial assistance. It targets those in the group with a need for loans varying between ₹10 lakh to ₹1 crore to undertake new ventures, create job opportunities and foster economic emancipation. This Stand-Up India has been a unique attempt to provide financial assistance, low interest rates and other support to the socially and economically backward sections of the country.
For any request or Article Research, visit the Community Page of Jaagruk Bharat.
Find the Stand-Up India Project list here.
For queries, grievances and help, contact Stand-Up India officials by dropping a mail at support@standupmitra.in or dialling 1800-180-111.
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