Stand up India Scheme

Stand-Up India for Financing SC/ST and/or Women Entrepreneurs

♦ Objective

Facilitate bank loans between 10 lakh and 1 crore to at least one scheduled caste (SC) or Scheduled Tribe, borrower and at least one woman per bank branch for setting up a greenfield enterprise. This enterprise may be in manufacturing, services or the trading sector.

♦ Eligibility criteria

SC/ST individuals & women entrepreneurs are the beneficiaries of the scheme-

• The applicant must be aged above 18 years.
• Only greenfield projects can apply for the loan scheme. GreenField signifies, in this context, the first time venture of the beneficiary in the manufacturing or services or trading sector or  agri-allied activities.
• Non-individuals, such as existing firms and businesses, can also apply for the scheme. However, 51% of the shareholding and controlling stakes of such firms must be held by either SC/ST and/or women entrepreneurs.
• The borrower should not have defaulted at any bank or financial institution.

♦ What are Agri-allied Activities?

The activities like pisciculture, beekeeping, poultry, livestock, rearing, grading, sorting, aggregation agro industries, dairy, fishery, agriclinic and agribusiness centers, food & agro-processing, etc. (excluding crop loans, land improvement such as canals, irrigation, wells) and services supporting these would be eligible for coverage under the scheme.

♦ Nature of loan, Security requirement and applicability of Interest Rates-

Composite loan (inclusive of term loan and working capital) between  10 lakh and upto  100 lakh representing upto 85% of the project cost would be eligible.

The rate of interest would be lowest applicable rate of the bank for that category (rating category) not to exceed (base rate (MCLR) + 3%+ tenor premium).

In addition to mortgage/hypothecation of Primary Asset acquired out of loan, the loan may also be secured by collateral security or guarantee of Credit Guarantee Scheme for Stand-Up India Loans (CGSSI) as decided by the banks.

♦ What are the salient features of Credit Guarantee Scheme for Stand Up India (CGSSI)?

Eligibility – The National Credit Guarantee Trustee Company (NCGTC) shall cover assistance of over  10 lakh and up to  100 lakh inclusive of working capital extended by eligible lending institutions to a single eligible borrower after entering into an agreement with the Trust without any collateral security and/or third party guarantees or such amount as may be decided by the Trust from time to time.

Details – Details can be accessed from the web site of NCGTC (www.ncgtc.in). Visit the link Products & Services and select Credit Guarantee Scheme for Stand up India (CGSSI) – Scheme Notification

♦ Repayment Tenure of Loans

The repayment period of the composite loan is to be fixed depending upon the nature of activity and useful life of assets purchased with bank loan but not to exceed 7 years with a maximum moratorium period of 18 months.

♦ Schemes for Loan Facility below Rs. 10 Lakhs

For loans below  10 lakh, banks are already lending under their existing schemes. Further, MUDRA Ltd. also operates 3 schemes namely Shishu/kishor/Tarun through banks for loans upto  10 lakh. Please visit www.mudra.org.in for further details.

♦ Other benefits under the scheme-

Apart from linking prospective borrowers to banks for loans , the web portal designed by SIDBI for Stand-Up India Scheme also provides handholding support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, work shed/utility support services, subsidy schemes etc

♦ Procedure to Apply

The scheme covers all branches of Scheduled Commercial Bank and can be accessed through the following three potential ways:

• Directly at a Bank Branch. 
• Through SIDBI Stand-Up India Portal (www.standupmitra.in)
• Through the Lead District Manager. The details of whom can be accessed here(https://www.standupmitra.in/LDMS.)

♦ Steps to be followed for availing the benefits of the scheme 

Step 1: Visit the Stand-Up India portal at www.standupmitra.in to understand the scheme details better.

Step 2: Click on the ‘Register’ button and answer a set of questions prompted.

Step 3: Based on your response, you will be categorised either as Trainee Borrower or Ready Borrower.

Step 4: Feedback will be given regarding the eligibility of the applicant for the loan.

Step 5: The applicant can then register for free and login to the portal.

Step 6: Upon logging in successfully, a dashboard will be displayed to the applicant to proceed with further actions.

♦ Questions asked at the time of registering on portal

• Location of the borrower
• Category – SC/ ST/ Woman
• Nature of business planned
• Availability of place to operate the business.
• Assistance needed for preparing a project plan
• Requirement of skills/training (technical and financial).
• Details of present bank account.
• Amount of own investment into the project
• Whether help is needed to raise margin money
• Any previous experience in business

Based on the response, the portal provides relevant feedback and helps categorize the visitor to the portal as a ready borrower or a trainee borrower.

♦ Can application be withdrawn to change the scheme?

Before effecting the first disbursement, the applicant can withdraw the application for reapply and the option is available through the dashboard ‘Withdraw to reapply’ of the applicant.

♦ How to change the scheme? 

Go to ‘My Profile’, click on ‘edit my details; change the parameters viz. size of the loan, green-field or not, percentage of stakeholders, women or SC/ST, etc. Based on the inputs given by the applicant, the portal would categorise the Schem

♦ Difference Between Startup India and Stand Up India Scheme

Stand Up India Scheme is to facilitate bank loans between  10 lakh to  1 crore to the enterprises promoted by SC or ST and Women entrepreneurs to set up green field projects in manufacturing, services, agri-allied activities or the trading sector.

Start Up India Scheme aims to boost innovative and technology led enterprises for new/existing enterprises. According to Dept. of Industrial Policy and Promotion, Ministry of Commerce and Industry, GoI vide Notification dated Feb 17, 2016, an entity shall be considered as a startup –

a) Startups means an entity, incorporated or registered in India Not prior to 10 years,

b) With annual turnover not exceeding  INR Rs. 100 crore in any preceding financial year, and

c) Working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

An entity is considered to be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize:

1. a new product or service or process, or

2. a significantly improved existing product or service or process, that will create or add value for customers or workflow.

♦ How is the Stand-Up India Scheme different from the SMILE Scheme?

SMILE Scheme is operated only through SIDBI for investment in projects coming up in 25 identified sectors under the Make in India programme for existing and new units. The support is in the nature of quasi equity and term loan on relatively soft terms, with the minimum term loan size for new units at 25 lakh. 

The Stand-Up India scheme is proposed to be operated through 1.25 lakh bank branches in the country. The loans would be above  10 lakh and up to  100 lakh specifically for SC/ST/Women entrepreneurs setting up green field projects.