“Stand-Up India scheme” was launched on April 5, 2016, by the Prime Minister Narendra Modi with a motive of promoting entrepreneurship at the grassroot level for creating employment opportunities and economic empowerment. The scheme is anchored by the Department of Financial Services (DFS). It is crafted after recognizing the challenges faced by the Scheduled Caste, Scheduled Tribes and women entrepreneurs while setting up new businesses, procuring loans, and other support services from time to time.
Stand-Up India will be beneficial for at least 2.5 lakh borrowers who can avail the benefits of this scheme through 1.25 lakhs bank branches located all over the country. The online portal of “Stand-Up India scheme” is based on three pillars – Handholding support, Credit guarantee, and providing financial information for the effective promotion of entrepreneurship among women and SC/ST communities. The process under this scheme would be conducted by SIDBI along with Dalit Indian Chamber of Commerce and Industry (DICCI) and other sectors in India. The offices of National Bank for Agriculture and Rural Development (NABARD) and SIDBI function as authorized Stand Up Connect Centres (SUCC).
Features of Stand-Up India scheme
1. Facility of bank loans worth Rs. 10 lakh and up to Rs. 1 crore will be provided to at least one SC/ST and one woman by every scheduled commercial bank branch to assist them in setting up of their businesses. The loan amount represents a maximum of 75 percent of the total business cost. This percentage will not apply in case the contribution of the borrower and other support from other schemes exceeds 25 percent of the total business cost.
2. Facility of debit card (RuPay) for the withdrawal of working capital.
3. Credit history of the borrower is yet to be developed.
4. Refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs.10,000 crore.
5. Creation of a corpus of Rs. 5,000 crore for credit guarantee through NCGTC.
6 Handholding support for borrowers with extensive support for pre-loan training requirements, facilitating loan, factoring, marketing, etc.
7. Availability of web portal for the online registrations and support services.
Objective of Stand-Up India scheme
The scheme aims to influence and extend the institutional credit system to the undeserved strata of society like the Scheduled Caste and Scheduled Tribes, and women entrepreneurs. The facility of bank loans between Rs. 10 lakh and Rs. 1 crore is provided to at least one SC/ST and woman entrepreneurs willing to start their own businesses. The enterprises may belong to trading, manufacturing, or service sectors. The person availing loan under this scheme should hold at least 51 percent of the shareholding and control in the enterprises.
Eligibility for applying for loan under Stand-Up India scheme
1. Applicants of the loan under this scheme should be at least 18 years of age.
2. Loans under this scheme can only be availed for a greenfield project. This means the business for which a person applying the loan should be his first business venture in the trading, manufacturing, or service sector.
3. At least 51 percent of the shareholding and control should be owned by the borrower of the loan under this scheme.
4. There should not be any default on the borrower’s end in any bank or financial institutions.
Rate of Interest on Loan under Stand-Up India scheme
The interest rate to be charged on the loan will be lowest of rates charged by the respective banks.
Security under Stand-Up India scheme
Apart from the primary security, the loan taken under this scheme can be secured by a collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans a the banks direct.
Repayment of Loans under Stand-Up India scheme
The loan taken under the scheme can be repaid in seven years with a maximum suspension period of 18 months.
How to apply for loan under Stand-Up India scheme?
An SC, ST, or a woman willing to start a new enterprise can avail a bank loan facility under this scheme in three ways-
1. By directly applying at the bank branch
2. By applying through the Stand-Up India portal
3. With the help of Lead District Manager (LDM)
Documents Required to apply for loan under Stand-Up India scheme
- Identity Proof: Voter’s ID Card / Driving License/ Passport / PAN Card / Signature identification from present bankers of a proprietor, partner or director ( if a company)
- Residence Proof: Recent electricity bill, telephone bills, or property tax receipt / Passport/voter’s ID Card of Proprietor, partner of Director (if a company)
- Business address proof
- Memorandum and Articles of Association of the Company, Partnership Deed of the partners
- Assets and liabilities statement of the promoters and guarantors along with latest income tax returns.
- SSI / MSME registration if applicable.
- Rent Agreement (if business premises on rent) and clearance from pollution control board if applicable.
- Photocopies of lease deeds/ title deeds of all the properties being offered as primary and collateral securities.
- Certificate of incorporation from Registrar Of Companies to establish whether majority stake holding in the company is in the hands of a person who belongs to SC/ST/Woman category.
- Last three years balance sheets of the Associate / Group Companies (if any).
- Certificates to prove whether the applicant belongs to SC/ST Category, wherever applicable.
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