You may already be zeroing in on your preferred niche or sector for business. You would do well to check out the Stand-up India scheme for entrepreneurs. This scheme aims at the promotion of entrepreneurship amongst scheduled castes and tribes and women and is supported by the DFS (Department of Financial Services), Union Ministry of Finance, Government of India. This scheme enables bank loans to be sanctioned between Rs.10 lakh and Rs.1 crore for one borrower and one woman borrower in every bank branch for establishing a greenfield enterprise. This could be in sectors like services, manufacturing or trading. For non-individual enterprises, 51% of the controlling and shareholding stake could be with an SC/ST or female entrepreneur.
Here’s looking at the eligibility criteria for the scheme:
- SC/ST and/or woman entrepreneurs above the age of 18
- Loans can be available for greenfield projects only which indicates first-time ventures in sectors like trading/services/manufacturing
- For non-individual enterprises, 51% of the controlling & shareholding stake should be held by women entrepreneurs and/or SC/ST applicants
- Borrowers should not be defaulters towards financial institutions
Here are some of the details of the loan:
- Loan purpose- Establishing new manufacturing/trading/services enterprises.
- Nature of loan- Composite loan (includes working capital and term loan) between Rs. 10 lakh and 1 crore.
- Loan size- 75% of project cost inclusive of working capital and term loan. The loan stipulation is expected to cover 75% of the project cost that would not apply if the contribution of the borrower and convergence support surpasses 25% of the cost of the project.
- Rate of Interest- The interest rate would be the lowest possible applicable rate of the financial institution for rating category which will not surpass base rate (MCLR) + 3% + tenor premium.
- Security- Apart from primary security, the loan can be secured under collateral guarantee/security of the Credit Guarantee Fund Scheme in case of stand up India scheme for loans (CFSIL) as decided by lenders.
- Repayment of loan- The loan can be repaid within 7 years with maximum moratorium period of 18 months.
- Working capital- For withdrawing working capital loans up to Rs. 10 lakh, this amount can be sanctioned via overdrafts. Rupay debit cards can be issued for borrower convenience. Cash Credit limit helps in sanctioning working capital loans of more than 10 lakh.
- Margin Money- The scheme entails 25% of margin money which can be offered in fusion with eligible State/Central schemes. These schemes can be drawn for getting admissible subsidies or for meeting all requirements in terms of margin money. Borrowers may be needed to provide at least 10% of project costs as their contributions.
Loan application procedure:
This scheme covers all Scheduled Commercial Banks where you have to fill out standup India application form and can be accessed via three methods:
- Directly applying at branches
- Via the standupmitra.in portal
- Via the Lead District Manager or LDM