Stand-Up India Loan Scheme: Features, Benefits, Interest Rate, Eligibility, Security, and Repayment

The Stand-Up India scheme aims to promote entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing them with access to credit. The scheme offers loans ranging from Rs. 10 lakh to Rs. 1 crore to set up greenfield enterprises in manufacturing, services, or trading sectors. By providing financial assistance and support, the scheme seeks to empower marginalised communities and promote economic growth through the creation of new businesses. Women entrepreneurs may also benefit from the Udyogini Scheme for additional financial support.

The Stand-Up India Scheme was introduced with a clear social and economic objective — to integrate underrepresented communities into India’s mainstream entrepreneurial ecosystem. Launched under the leadership of Narendra Modi, the scheme aims to expand access to institutional finance and encourage inclusive business ownership across the country.

Key objectives of the Stand-Up India Scheme

The scheme aligns closely with India’s broader economic initiatives such as Make in India, Digital India, and the vision of Atmanirbhar Bharat by encouraging grassroots entrepreneurship across manufacturing, services, and trading sectors.

Stand-Up India Scheme - nature of loan

The Stand-Up India Scheme offers term loans for greenfield projects, meaning it supports the establishment of new ventures in the manufacturing, services, or trading sectors. These loans are meant to be used for business purposes such as setting up new units, acquiring machinery, or financing working capital needs. The scheme aims to promote entrepreneurship and facilitate the growth of businesses owned by women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing access to credit on favourable terms.

Size of Stand-Up India Scheme loan

The Stand-Up India scheme provides loans ranging from Rs. 10 lakh to Rs. 1 crore per borrowing unit. This loan is intended to facilitate the establishment of greenfield enterprises in the manufacturing, services, or trading sectors. The scheme aims to support entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST) by providing access to credit for starting new ventures and fostering economic development in these communities.

The interest rates for the loans under the Stand-Up India scheme are determined by the respective banks as per their internal policies. However, the interest rate cannot exceed the lowest applicable rate of the bank for that category (not exceeding MCLR + 3% + tenure premium). The interest rate may vary depending on the credit rating, risk profile, collateral security, and other factors.

As per the data available on the Stand-Up India Portal as on September 21, 2023, the average interest rate for loans sanctioned under the scheme was 9.67%.

Applying for the Stand-Up India Scheme is simple and can be done either online through the official portal or offline at your nearest bank branch.

Online application process (via Stand-Up India portal)

1. Visit the official Stand-Up India portal.
2. Enter your business location details — state, district, and city.
3. Select your category — SC, ST, or Woman — and confirm that you hold at least a 51% stake if applicable.
4. Provide details about your proposed business, including:
   • Nature of the business
   • Desired loan amount
   • Business description
   • Premises details
5. Share any previous business experience and operational tenure, if applicable.
6. Indicate whether you require handholding or additional support services.
7. Enter personal information, including enterprise name, business structure, and contact details.
8. Click “Register” to submit your application.
9. After registration, a bank official will contact you to complete the loan formalities.

Offline application process

• Visit your nearest scheduled commercial bank branch.
• Approach the Lead District Manager (LDM) of your district.
• Submit the completed application form along with the required documents.
• Bank officials will assist you through the verification process and facilitate loan disbursal.

This dual application route ensures accessibility for all eligible entrepreneurs, whether they prefer digital submission or face-to-face assistance.

The documents required for availing a loan under the Stand-Up India scheme are:

• Proof of identity: Voter’s ID Card, Passport, Driving License, PAN Card, or signature identification from the applicant’s current bankers (proprietor, partner, or director, if a company).
• Proof of residence: Recent telephone or electricity bills, property tax receipt, Passport, or Voter’s ID Card of the proprietor, partner, or director (if a company).
• Proof of business address: Documents validating the business address.
• Non-default confirmation: Evidence that the applicant is not in default with any bank or financial institution.
• Company documents: Memorandum and Articles of Association for companies or Partnership Deed for partnerships.
• Financial statements: Assets and liabilities statement of promoters and guarantors, along with the latest income tax returns.
• Rent agreement: If the business premises are rented, include the rent agreement and, if applicable, clearance from the pollution control board.
• SSI/MSME registration: If applicable, provide the MSME registration certificate.
• Projected financials: Balance sheets for the next two years for working capital limits or for the loan period for term loans.
• Property documents: Photocopies of lease deeds or title deeds of all properties being offered as primary and collateral securities.
• SC/ST category proof: Documents to confirm if the applicant belongs to the SC/ST category, if applicable.
• Certificate of incorporation: From the Registrar of Companies (ROC) to verify if majority stakeholding is held by someone from SC/ST/Woman category.

For exposure above Rs. 25 lakh:

• Unit profile: Includes names of promoters, other directors, business activities, addresses of all offices and plants, shareholding pattern, etc.
• Financial statements of associate/group companies: Balance sheets for the last three years, if applicable.
• Project report: For proposed projects requiring term funding, detailing machinery acquisition, suppliers, costs, production capacity, projected profits and losses, labor requirements, and other financial assumptions.
• Manufacturing details: If applicable, include the manufacturing process, major executives, tie-ups, raw material details, suppliers, buyers, competitors, and the company’s comparative strengths and weaknesses.

While the Stand-Up India Scheme aims to promote entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST), it faces several challenges. One key challenge is the lack of awareness about the scheme among the target beneficiaries, which hinders its uptake. Additionally, there may be challenges related to the availability of collateral and the complex application process, especially for first-time entrepreneurs. Moreover, ensuring the timely disbursal of loans and providing adequate support for business development are crucial for the scheme's success but can be challenging to implement effectively.

Whether you are looking to expand your operations, invest in new equipment, or fulfil your working capital requirements, you can take a look at Bajaj Finance Business Loan. It offers three unique variants of loans - Term Loan, Flexi Term Loan, and Flexi Hybrid Term Loan - with features such as no collateral, minimal documentation, and flexible repayment options. You can avail a loan of up to 8000000 at a competitive interest rate and get the money in your bank account in 48 hours*.

Additional Read: Working Capital Management

Additional Read: Capital Budgeting

Both Stand-Up India and PM Mudra Yojana (Mudra Loan) are Government of India initiatives designed to support entrepreneurship, but they cater to different target groups and loan requirements. The following comparison highlights the key differences:

When to choose which scheme

• Stand-Up India: If you are an SC/ST or woman entrepreneur establishing a new business and require funding between Rs. 10 lakh and Rs. 1 crore.
• Mudra loan: If you need smaller-scale funding (up to Rs. 10 lakh) or are looking to expand an existing micro-enterprise.

This comparison helps entrepreneurs select the most suitable government-backed funding option based on their profile, business stage, and capital requirements.