What is the impact of the Stand-Up India Scheme?
The Stand-Up India Scheme is a government initiative to support entrepreneurship among SC/ST and women in India. The scheme aims to provide bank loans of Rs. 10 lakh to Rs. 1 crore to at least one SC/ST and one-woman borrower per bank branch for setting up a new enterprise in manufacturing, services or trading sector. The scheme also offers handholding support, training, mentoring and Rupay debit cards to the borrowers. The impact of the scheme is to promote economic empowerment, social inclusion and job creation for the marginalised groups in India. Entrepreneurs can also benefit from understanding the Mudra Loan interest rate when considering their financing options.
Purpose of the Stand-Up India Scheme Loan
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.
Objective of Stand-Up India Scheme Loan
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
| Objective | Description |
|---|
| Financial inclusion | Improve access to formal credit for entrepreneurs from Scheduled Caste (SC), Scheduled Tribe (ST), and women communities. |
| Entrepreneurship promotion | Encourage first-generation entrepreneurs to establish and manage their own businesses. |
| Employment generation | Support the creation of jobs through the establishment of new greenfield enterprises. |
| Economic empowerment | Help reduce income inequality by enabling marginalised groups to participate in business activities. |
| Sustainable growth | Promote inclusive and balanced economic development across regions and communities. |
| Skill and knowledge support | Provide mentoring, training, and facilitation support to new entrepreneurs through the Stand-Up India Portal. |
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.
Features and benefits of the Stand-Up India scheme
Some of the key features and benefits of the Stand-Up India scheme are:
- It provides a composite loan (inclusive of Term Loan and working capital) between Rs. 10 lakh and Rs. 1 crore to eligible borrowers for setting up a Greenfield enterprise.
- The loan is repayable in 7 years with a maximum moratorium period of 18 months.
- The loan is secured by collateral or guarantee of the credit guarantee fund scheme for Stand-Up India loans (CGFSIL).
- The loan is available at the lowest applicable rate of the bank for that category (not exceeding MCLR + 3% + tenure premium).
- The borrower is given a rupay debit card for convenience and ease of operation.
- The borrower is also eligible for a subsidy under the differential rate of Interest (DRI) scheme, subject to certain conditions.
- The borrower can avail hand holding 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.
- The borrower can access the Stand-Up India Portal for information, registration, application, and tracking of the loan status.
Eligibility criteria for the Stand-Up India Scheme
Before applying, it is important to understand the eligibility criteria for the Stand-Up India Scheme. The programme, implemented by the Ministry of Finance, has specific requirements intended to support first-generation entrepreneurs from underrepresented communities.
Eligibility checklist
| Criteria | Requirement |
|---|
| Community | Applicant must belong to the SC, ST, or women category (for companies, at least 51% ownership must be held by the eligible category). |
| Age | Minimum 18 years. |
| Project type | The venture must be a greenfield enterprise (a first-time business initiative). |
| Sector | Manufacturing, services, or trading. |
| Business default status | The applicant must not have defaulted with any bank or NBFC. |
| Business structure | Sole proprietorship, partnership, LLP, private limited company, or cooperative. |
| Majority stake (for companies) | An SC/ST or woman entrepreneur must hold at least a 51% controlling stake. |
Who is not eligible?
- Individuals who have previously operated a similar business venture.
- Applicants who have defaulted on any existing loan with a bank or NBFC.
- Businesses where SC/ST individuals or women do not hold a majority stake in non-individual entities.
- Projects that are not greenfield in nature, such as the expansion of an existing business.
These criteria ensure that the scheme benefits genuine first-time entrepreneurs and supports inclusive participation in India’s business ecosystem.
Stand-Up India loan interest rates
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%.
How to apply for the Stand-Up India Scheme
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)
- Visit the official Stand-Up India portal.
- Enter your business location details — state, district, and city.
- Select your category — SC, ST, or Woman — and confirm that you hold at least a 51% stake if applicable.
- Provide details about your proposed business, including:
- Nature of the business
- Desired loan amount
- Business description
- Premises details
- Share any previous business experience and operational tenure, if applicable.
- Indicate whether you require handholding or additional support services.
- Enter personal information, including enterprise name, business structure, and contact details.
- Click “Register” to submit your application.
- 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.
Documents required for the Stand-Up India scheme
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.
Challenges associated with the Stand-Up India Scheme
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 Finserv 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 Rs. 80 lakh 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
Stand-Up India Scheme vs mudra loan
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:
| Parameter | Stand-Up India Scheme | Mudra loan (PM Mudra Yojana) |
|---|
| Target beneficiary | SC, ST, and women entrepreneurs only | All Indian citizens/micro-entrepreneurs |
| Loan amount | Rs. 10 lakh – Rs. 1 crore | Up to Rs. 10 lakh (divided into Shishu, Kishore, and Tarun categories) |
| Project type | Greenfield enterprises only | Both new and existing businesses |
| Nodal agency | Small Industries Development Bank of India | MUDRA Ltd |
| Sectors covered | Manufacturing, services, trading | All non-farm income-generating activities |
| Interest rate | Bank’s MCLR + 3% + tenor premium | Determined by the lending institution |
| Collateral | Covered under CGFSIL guarantee | Not required for Shishu and Kishore loans |
| RuPay card | Yes | Not standard |
| Handholding support | Yes — via Stand-Up India Portal | Limited |
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.
Helpful resources and tips for business loan borrowers
