What the Stand-Up India Scheme is
The Government of India launched the Stand-Up India Scheme in April 2016 to finance greenfield projects set up by SC/ST and women entrepreneurs in services, agri-allied activities, manufacturing or the trading sector.
Beneficiaries can avail composite loans — including both term loan and working capital components — of ₹10 lakh to ₹1 crore, financing up to 85% of project cost. The interest rate is the lowest applicable rate of the bank for the rating category. Borrowers needing handholding for their greenfield project can register as trainee borrowers to access support from the Lead District Manager and linked offices of SIDBI and NABARD.
How the scheme works
Stand-Up India aims to get every scheduled bank branch to extend a loan of ₹10 lakh to ₹1 crore to at least one SC/ST borrower and at least one woman borrower, for setting up a greenfield enterprise. For non-individual enterprises, SC/ST or women entrepreneurs must hold a minimum of 51% of the shareholding and controlling stake.
Beyond linking borrowers to scheduled banks, the Stand-Up India online portal — developed by SIDBI — guides entrepreneurs through setting up a business, from training right through to filling in the loan application as the bank requires it.
Handholding support available
- Training — technical and financial
- Margin money support
- DPR preparation
- Bill discounting
- E-commerce registration
- Shed and workplace identification
- Raw material sourcing
- Registration for taxation
Where we come in. Every branch is meant to fund at least one SC/ST and one woman borrower under this scheme — but the target is widely under-used and branch staff are often unfamiliar with the process. Knowing that, and knowing who to ask, is most of the battle.
Scheme highlights
- Interest Rate
- Lowest applicable rate of the bank for the rating category
- Loan Amount
- ₹10 lakh to ₹1 crore
- Repayment Tenure
- 7 years, including a moratorium of up to 18 months
- Margin Money
- 15%, with at least 10% of project cost as the borrower’s own contribution; the rest can be arranged in convergence with other Central or State schemes
Features in detail
Interest rate
The rate under Stand-Up India is the lowest applicable rate of the bank for the rating category, and it should not exceed the base rate plus 3% and tenure premium. That cap is worth knowing — it is your protection against being quoted a commercial rate on a scheme loan.
Loan amount and nature
- Nature of loan — a composite loan combining working capital and term loan, ranging from ₹10 lakh to ₹1 crore.
- Size of loan — 85% of project cost, including both term loan and working capital facilities. If the borrower’s contribution and support from other schemes together exceed 15% of project cost, the 85% provision does not apply.
- Working capital up to ₹10 lakh — sanctioned as an overdraft, with a RuPay debit card issued to the borrower.
- Working capital above ₹10 lakh — sanctioned as a Cash Credit limit.
Repayment tenure
Seven years, including a moratorium of up to 18 months — a genuinely useful runway for a first venture that has not yet begun generating revenue.
Security
Apart from the primary security, banks may require additional security in the form of collateral or credit guarantee cover offered through the Credit Guarantee Scheme for Stand-Up India (CGSSI).
Margin money
Borrowers must offer 15% of project cost as margin money, of which at least 10% must be their own contribution. The remainder can be arranged in convergence with eligible Central or State schemes — which is how many borrowers bring their actual out-of-pocket down to the minimum.
Eligibility criteria
- Borrower
- SC/ST and/or women entrepreneurs
- Minimum Age
- 18 years
- Project
- Greenfield projects only — the first-time venture of the beneficiary in services, agri-allied activities, manufacturing or trading
- Non-individual Enterprises
- 51% of shareholding and controlling stake must be held by women entrepreneurs and/or SC/ST
Greenfield means greenfield. The scheme funds a first venture. An existing business looking to expand does not qualify here — look at PMEGP for a second loan on an existing unit, or CGTMSE for collateral-free expansion credit.
Documents required
- Proof of identity — Voter’s ID card, driving licence, PAN card, signature identification from present bankers of the proprietor, passport, or of the partner or director in the case of a company.
- Proof of residence — recent telephone bills, property tax receipt, passport or Voter’s ID card of the proprietor, electricity bill, or of the partner or director.
- Proof of business address.
- Confirmation the applicant is not a defaulter with any bank or financial institution.
- Memorandum and Articles of Association of the company, or the partnership deed.
- Assets and liabilities statement of guarantors and promoters, with latest income tax returns.
- Rent agreement, if the business premises are rented, and clearance from the pollution control board where applicable.
- SSI or MSME registration, if applicable.
- Projected balance sheets for the next 2 years for working capital limits, and for the loan tenure in the case of a term loan.
- Photocopies of lease deeds or title deeds of all properties offered as primary and collateral security.
- Documents proving the applicant belongs to the SC/ST category, where applicable.
- Certificate of incorporation from the ROC, establishing that majority shareholding is held by a person in the SC/ST or woman category.
Additional documents for loans above ₹25 lakh
- Profile of the unit — names of promoters and other directors, the activity undertaken, addresses of all offices and plants, and the shareholding pattern.
- Last 3 years’ balance sheets of any associate or group companies.
- Project report — details of machinery to be acquired, suppliers and prices, financial details including assumed capacity utilisation, production, machine capacity, sales, projected profit and loss and balance sheets for the loan tenure, plus labour and staffing details.
- Operational detail — the manufacturing process where applicable, profile of company executives, raw materials and their suppliers, any tie-ups, details of buyers, major competitors, and the company’s strengths and weaknesses relative to them.