India’s growth story is shaped not just by large corporations but by individuals who dare to start something new. Yet, for many first-time entrepreneurs, access to finance remains the toughest barrier.
Women and members of SC/ST communities often face additional challenges, from a lack of collateral to limited exposure to formal banking. These barriers prevent bright ideas from turning into sustainable businesses.
To address this gap, the government introduced the Stand-up India Scheme. It is designed to support inclusive growth by offering financial assistance and guidance to underrepresented entrepreneurs. By focusing on greenfield projects, the scheme creates fresh opportunities and helps build a more balanced entrepreneurial ecosystem.
What is the Stand-up India Scheme?
The Stand-up India Scheme was introduced by the Department of Financial Services, Ministry of Finance. It provides loans to SC, ST, and women borrowers to establish greenfield enterprises. Greenfield projects are first-time ventures of beneficiaries in sectors such as manufacturing, services, trading, or agriculture-related activities.
This scheme is one of the flagship Micro, Small, and Medium Enterprises (MSME) government schemes aimed at promoting entrepreneurship in underrepresented sections of society. By ensuring each bank branch provides loans to at least one SC/ST borrower and one woman borrower, the scheme guarantees widespread reach across the country.
Key Features of the Stand-up India Scheme
Here are a few features of the Stand-up India Scheme:
- Loan Structure
Loans under this scheme are composite in nature. They include both term loans and working capital loans. The amount sanctioned ranges from ₹10 lakh to ₹1 crore.
- Project Cost Coverage
The scheme can cover up to 85% of the project cost. This applies when the borrower contributes at least 10% and the margin money of 15% is supported through central or state MSME government schemes.
- Interest Rates and Repayment
The interest rate is set at the lowest applicable rate in the category. It cannot exceed the base rate or the Marginal Cost of fund-based Lending Rate (MCLR) plus 3% and tenor premium. The repayment period is seven years, with a moratorium of up to 18 months.
- Working Capital
For working capital needs up to ₹10 lakh, an overdraft facility is provided. Larger amounts are covered through cash credit.
- Credit Guarantee
Loans can be secured under the Credit Guarantee Fund Scheme for Stand Up India loans, depending on the bank’s decision.
Why the Stand-up India Scheme is Important
Since its launch, the Stand-up India Scheme has sanctioned over ₹40,700 crore to more than 1.8 lakh accounts. This scale underscores its importance in fostering an entrepreneurial ecosystem that includes those often overlooked.
The scheme facilitates access to institutional credit without unnecessary hurdles. It provides support to aspiring entrepreneurs who want to establish their first business venture. By doing so, it also promotes job creation and raises the standard of living for both entrepreneurs and their employees.
Benefits of the Stand Up India Initiative
The Stand Up India initiative brings several practical benefits that make entrepreneurship more accessible and sustainable for new business owners, like:
- Provides bank loans between ₹10 lakh and ₹1 crore for setting up new businesses in manufacturing, trading, or services.
- Makes credit more accessible for SC/ST and women entrepreneurs, encouraging more diversity in business.
- Helps cover essential expenses, such as equipment, working capital, and infrastructure.
- Connects entrepreneurs with MSME government schemes, offering training and skill development opportunities.
- Creates more job opportunities by supporting new businesses and startups.
- Reduces barriers to funding by directing banks to actively support eligible entrepreneurs.
- Offers handholding support, including guidance, mentoring, and access to resources for sustainable growth.
- Strengthens the overall startup ecosystem by promoting financial inclusion and entrepreneurship.
Eligibility for the Stand-up India Scheme
To qualify for the scheme, the applicant must:
- Belong to the SC/ST community or be a woman entrepreneur.
- Be at least 18 years old.
- Set up a greenfield enterprise in manufacturing, services, trading, or agriculture-allied sectors.
- Hold at least 51% of ownership and control in case of non-proprietary businesses.
- Have no history of loan defaults with banks or financial institutions.
How the Stand-up India Scheme Supports Inclusive Growth
The scheme plays a vital role in driving inclusive growth by empowering entrepreneurs and strengthening local economies.
- Job Creation at the Grassroots Level
By enabling greenfield enterprises, the scheme fuels local job opportunities. It allows entrepreneurs to hire employees and create livelihood options in their communities.
- Encouraging First-time Business Owners
The scheme is designed for first-time ventures. It ensures that individuals with no prior business experience can step into entrepreneurship with confidence.
- Strengthening MSME Growth
The scheme works in conjunction with other MSME government schemes, such as Mudra Yojana or CGTMSE. Together, they create a supportive framework for small and medium-sized businesses to grow.
A Milestone in Inclusive Growth
The Stand-up India Scheme continues to open doors for first-time entrepreneurs, turning barriers into opportunities. By linking projects with MSME government schemes, it offers both financial backing and long-term stability.
Many established banks and lending partners, ranging from national networks to private institutions, like HDFC, have quietly extended this support nationwide. Their involvement ensures that credit reaches deserving entrepreneurs who might otherwise have been overlooked.
Through such collaboration, the Stand-up India Scheme is fostering stronger communities, generating employment opportunities, and making the entrepreneurial landscape more inclusive.
