The aim of the Stand up India scheme is to promote entrepreneurship among scheduled tribes and castes and women. It was launched by the Department of Financial Services (DFS), Ministry of Finance, Government of India.
The scheme provides bank loans between the monetary amount of Rs 10 lakh and Rs 1 crore to at least one Scheduled Tribe or Scheduled Caste borrower or a minimum of one woman borrower per bank branch for setting up a greenfield enterprise. The enterprise can be of any nature, like manufacturing, trading sector or services. In the case of non-individual enterprises, at least 51% of the controlling and shareholding stake should be held by either a woman entrepreneur or a Scheduled Caste or Scheduled Tribe entrepreneur.
The following mentioned are the details of the loan under the Stand up India scheme by the Department of Financial Services, India
- Nature of Loan
Composite loans that are inclusive of term loan and working capital) between Rs 10 lakh and up to Rs 100 lakh.
- Purpose of Loan
In the case of setting up a new enterprise in the manufacturing, trading or service sector by a woman entrepreneur or a Scheduled Caste or Scheduled Tribe entrepreneur.
- Rate of Interest
The interest rate would be the lowest applicable rate of the bank for that particular rating category and it should not exceed base rate + 3% + tenor premium.
- Size of the Loan
A composite loan of 75% of the project cost inclusive of term loan and working capital. In case the borrower’s contribution along with the convergence support from any other scheme exceeds 25% of the project cost, the stipulation of the loan applied to cover 75% of the project cost would not be considered.
Except for the primary sector, the loan can be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.
- Repayment of the Loan
The loan is repayable in 7 years with a maximum moratorium period of 18 months.
- Working capital
For the drawal of working capital up to Rs 10 lakh, in a similar way can be sanctioned by way of overdraft. The Rupay debit card is to be issued for convenience borrowers. Working capital limit above Rs 10 lakh to be sanctioned by way of Cash Credit Limit
Application for Loans
The Stand up India scheme covers all branches of Scheduled Commercial Banks in India, will be accessed in three potential ways:
- Through the Stand-Up India portal
- Through the Lead District Manager
- Directly at the branch
The eligibility criteria for acquiring a loan under the Stand up India scheme are as follows:
- Scheduled Caste Scheduled Tribe and/or woman entrepreneurs should be at least 18 years of age
- The loans under this scheme are only for greenfield projects. In this context, the ventures carried out for the first time of the beneficiary in the manufacturing, trading or service sector
- In the case of a nin-individual organisation, 51% of the controlling and shareholding stake should be held by a woman entrepreneur or a Scheduled Caste or Scheduled Tribe entrepreneur
- The borrower of the loan should not be in default to any bank or financial institution.