PM Narendra Modi supporting the entrepreneurial spirit, has launched various schemes and initiatives under the government of India to focus on building self-employment amongst the Millenials.
On 5th April 2016, PM Modi launched the Stand Up India Scheme with a motive to promote entrepreneurship at the grassroots level for creating employment opportunities and economic empowerment.
Stand Up India Scheme
The Stand Up India Scheme (1) has been specially formulated to facilitate bank loan between Rs 10 lakh & Rs 1 crore to at least one Scheduled Caste or Scheduled Tribe borrower and minimum one woman borrower per bank branch for setting up greenfield business.
The Stand-Up India Scheme can be beneficial for over 2.5 lakh borrowers who can avail benefits from 1.25 lakh bank branches PAN India.
An individual must qualify the following eligibility (2) to apply for Stand Up India Scheme,
- Applicant must be at least 18 years of age
- Individuals can only avail loans for a greenfield enterprise project, i.e., the first business venture of the individual
- The borrower of the credit should own a minimum of 51% of the shareholding and control of the enterprise
- The borrower must not be in default to any bank or financial institution
Documents Requirement for Stand Up India Scheme
Following documents are required to apply for a loan under the Stand Up India Scheme
- Identity Proof: Voters ID card, Driving License, Passport, or PAN Card. In case of a company, a signature identification from current bankers of a proprietor, partner or director
- Residence Proof: Recent electricity bill, telephone bills, property tax receipt, Passport, voters ID Card
- Business address proof: Address proof for enterprise
Other Documents Required
- Memorandum & Articles of Association of the Company or Partnership Deed of the partners
- Assets and liabilities statements of the promoters and guarantors along with the latest income tax returns.
- Rent Agreement
- SSI / MSME registration, if applicable
- Copies of lease deeds of the properties being offered as primary and collateral securities
- Certificate of incorporation from RoC to establish whether the majority stakeholding in the firm is in the hands of the individual who belongs to SC, STor Woman category
- Document proving an individuals identity concerning SC/ST category
How to Apply for Standup India?
A person belonging to the SC/ST category or a woman looking forward to starting a greenfield enterprise can avail a bank loan under the Stand Up India Scheme by,
- Directly approaching the bank branch
- Via SIDBI’s Stand Up India portal (3)
- Via the lead District Manager
Loan under Stand Up India – Everything You Need to Know
Terms of loan
Typically, at the initial stage, the approach of the Stand Up India Scheme is based on answers to a particular set of relevant questions (4).
On the basis of the response provided, the portal gives relevant feedback and helps in categorizes the visitor to the portal as a ‘ready borrower’ or ‘trainee borrower’.
The answers to be provided by the borrower are,
- Location of the business
- Category of the applicant- SC/ST/Women
- Nature of the business
- Expected loan amount
- Available space for business- rented/owned/leased
- If handholding support is required
Stand Up India scheme provides a composite loan, inclusive of term capital & working capital, of Rs 1 lakh to Rs 100 lakh.
Collateral Security for Loan
The bank’s decision to request for collateral security depends on the borrower’s profile.
They can either request for collateral security or provide the loan under the CGTMSE (Credit Guarantee Fund Trust for Micro & Small Enterprises) scheme without any collateral security.
Repayment of Loan
The loan provided under the Stand Up India scheme is approved with a repayment duration of up to 7 years with an interim period of maximum 18 months.
Rate of Interest on Loan
The interest rate should be the lowest applicable rate of the bank for the rating category and should not exceed (base rate (MCLR)+3%+tenor premium).
Bank Branches under Stand Up India Scheme
- Bank of Baroda
- Axis bank
- Canara Bank
- Central Bank of India
- Read the full list here
You can look for the Agency names assisting with Stand Up India Scheme in your town by checking the Connect Centers available in your area.
The connect centers are available pan India in the states of
- Andhra Pradesh
- Tamil Nadu
- Read the full list here
The Stand Up India Scheme that comes as a part of the StartUp India Action Plan 2016 launched for encouraging startups and new businesses in India has provided a golden opportunity for all the budding entrepreneurs hailing from SC, ST, and women categories.
Startup India details here.
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