Starting a business takes access to capital, the right guidance, and most importantly, someone who believes in your potential. But if you are a first-time entrepreneur from a Scheduled Caste (SC), Scheduled Tribe (ST), or a woman entrepreneur, the path can often feel steeper. This is where the Stand Up India scheme plays a transformational role.
Designed to promote inclusive entrepreneurship, this government-backed initiative helps underrepresented entrepreneurs launch greenfield businesses across manufacturing, services, trading, and agriculture-allied sectors. If you’re ready to build something from scratch but struggling with the financial start, the Stand Up India scheme is built for you. Let’s get to know it more.
All You Need to Know About the Stand Up India Scheme
Launched on 5th April 2016, the Stand Up India Scheme is an initiative under the Department of Financial Services, Ministry of Finance. The primary aim is to boost grassroots-level entrepreneurship by offering bank loans to SC/ST and women entrepreneurs who wish to establish new enterprises.
Whether it is a service-based setup or a manufacturing plant, this MSME government scheme encourages you to take the leap by offering a well-structured credit and support system.
Key Features of the Stand Up India Scheme
Understanding how the scheme works is essential for making the most of it. Here’s a breakdown of its standout features:
- Loan Size: Offers composite loans ranging from ₹10 lakh to ₹1 crore.
- Loan Coverage: The composite loan can cover up to 85% of the total project cost, provided the entrepreneur contributes at least 10%.
- Interest Rate: The interest rate is competitive and capped; it cannot exceed the MCLR or Base Rate plus 3% and the applicable tenor premium.
- Repayment Period: Up to 7 years with a moratorium period of up to 18 months.
- Bank Coverage: Every branch of scheduled commercial banks is expected to offer a loan to at least one SC/ST and one woman entrepreneur.
- Support for Margin Money: Can be supplemented by eligible central/state government schemes, up to 15% of the project cost.
These structured provisions make it easier for new entrepreneurs to get started without being overwhelmed by collateral or high-margin requirements.
Why the Stand Up India Scheme Matters
The Stand Up India Scheme is not just a financial assistance programme; it is a catalyst for change. Over the last seven years, more than ₹40,700 crore has been sanctioned under this MSME government scheme to 1.8 lakh plus accounts, proving its reach and relevance.
Here’s why the scheme has become essential for fostering inclusive entrepreneurship:
- Encourages first-time entrepreneurs to take calculated business risks.
- Bridges the financial gap for marginalised communities and women.
- Acts as a springboard for job creation and improves living standards in both rural and urban areas.
- Contributes to grassroots development and community upliftment.
The scheme fills a crucial gap in MSME government schemes by offering access to credit and guidance for those who need it most.
Benefits of the Stand Up India Scheme
If you are wondering whether the scheme offers real value, here are some tangible benefits:
- Targeted Empowerment: Focuses exclusively on SC/ST and women entrepreneurs, a segment traditionally left out of mainstream funding.
- Substantial Financial Support: Offers a large share of project cost, up to 85%, easing the pressure on new business owners.
- Handholding by Partner Banks: Applicants banking with certain financial institutions are provided with guided assistance through the portal.
These benefits make the Stand Up India Scheme a well-rounded solution, especially for entrepreneurs launching their first business.
Eligibility and Documentation for the Stand Up India Scheme
To make the most of this scheme, it is essential to meet the eligibility criteria and submit the right documents:
Eligibility:
- The applicant must be an SC/ST or a woman entrepreneur.
- Must be aged 18 years or older.
- Should be starting their first business (greenfield projects only).
- The business can fall under manufacturing, services, trading, or agri-allied sectors.
- For non-individual enterprises, a minimum 51% ownership must be held by eligible applicants.
- No history of default with any financial institution.
Key Documents:
- Identity proof (Aadhaar, PAN card)
- Caste certificate (for SC/ST applicants)
- Business plan/project report
- Proof of address
- Proof of ownership
- Bank account statements
- Quotation for machinery/equipment (if applicable)
Ensuring all documentation is in place makes the process faster and smoother.
A Step Towards Inclusive Economic Growth
The Stand Up India Scheme represents a powerful step towards inclusive economic growth. It encourages first-time entrepreneurs to break new ground by supporting greenfield projects in core sectors.
Through structured loan offerings, minimal interest rates, and handholding across the digital journey, this scheme enables bold ideas to become sustainable businesses. For those seeking a trustworthy partner to guide them through this journey, financial institutions like HDFC Bank offer seamless digital application support and assistance.
With the right support and access to credit, every aspiring entrepreneur can now take that important first step.
Source: https://www.rbi.org.in/commonman/English/scripts/FAQs.aspx?Id=1691
Also used as “MSME government scheme”
