Stand Up India
Introduction
The Government of India launched the Stand Up India scheme on April 5, 2016, as part of efforts to support entrepreneurship among women and Scheduled Caste & Scheduled Tribe (SC & ST) communities. The scheme is similar to, but different from, Start-up India, as both are enablers and beneficiaries of other key government schemes such as Make in India, Industrial Corridor, Dedicated Freight Corridor, Sagarmala, Bharatmala, Digital India, BharatNet and UMANG (Unified Mobile Application for New-age Governance).
Policy Detail
Stand Up India aims to empower every Indian and enable them to be independent. The programme recognises challenges faced by the Scheduled Caste (SC), Scheduled Tribe (ST) and women entrepreneurs in setting up enterprises, obtaining loans and other support needed from time to time for succeeding in business. The programme, consequently, aims to create an ecosystem that facilitates and continues to provide a supportive environment for doing business.
The objective of the scheme is to facilitate composite bank loans (including term loan and working capital) between Rs. 10 lakh (US$ 14,000) and Rs. 1 crore (US$ 140,000) to at least one SC or ST borrower and one-woman borrower per bank branch (without collateral) for setting up a Greenfield enterprise. This enterprise can be set up in either of these sectors—manufacturing, services, agri-allied activities, or trading. In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or women entrepreneur.
Scheme Guidelines
Size of Loan
The composite loan (85% of the project cost) includes term loan and working capital. The loan will not be applicable if the borrower’s contribution, along with convergence support from any other schemes, exceeds 15% of the project cost.
Interest Rate
The rate of interest would be the lowest applicable rate of the bank for that category (rating category) and should not exceed Base Rate (Marginal Cost of Fund-based Lending Rate (MCLR)) + 3% + Tenor Premium.
Security
Besides primary security, the loan may be secured by collateral security or guarantee of the Credit Guarantee Fund Scheme for Stand Up India Loans (CGFSIL) as decided by the banks.
Repayment
The loan is repayable in seven years with a maximum moratorium period of 18 months.
Working Capital
For withdrawal of working capital up to Rs. 10 lakh (US$ 14,000), the same may be sanctioned by way of overdraft. Rupay debit card to be issued to all borrowers for convenience. Additionally, working capital limit above Rs. 10 lakh (US$ 14,000) to be sanctioned by way of cash credit limit.
Margin Money
The scheme envisages 15% margin money, which can be provided in convergence with the Central/State schemes. While such schemes can be withdrawn for availing admissible subsidies or meeting margin money requirements, in all cases, the borrower shall be required to bring in a minimum 10% of the project cost as its own contribution.
Responsibilities of Stakeholders
Small Industries Development Bank of India
- Operate and maintain the Stand-Up India web portal
- Arrange handholding support for trainee borrowers
- Liaise with banks for follow up in potential cases through LDM (Lead District Manager)/SLBC (State Level Bankers' Committee)
- Coordinate with LDM for easing bottlenecks
- Assist the SLBC and DLCC (District-level Credit Committee)
- Participate in Stand Up events organised by NABARD (the National Bank for Agriculture and Rural Development)
National Bank for Agriculture and Rural Development
- Training of trainers, LDMs and bank officers for Stand Up India scheme
- Arrange handholding support for trainee borrowers
- Liaise with banks for follow up in potential cases through LDM
- Coordinate with LDM for easing bottlenecks
- Assist the SLBC and DLCC in reviews and monitoring
- Organise events as frequently as necessary—at least once in each quarter for experience sharing, etc., among stakeholders
Lead District Managers
- Monitor progress of filed cases
- Serve as contact point for SIDBI/NABARD for easing bottlenecks
- Sensitise bankers on potential borrowers
- Follow up with concerned regional/zonal office of the respective bank to ensure timely processing/sanction of loans as per timeframe specified in the Code of Bank’s Commitment to Micro and Small Enterprises
- Ensure that the borrower’s requirement of handholding support is satisfied to the extent possible
- Organise DLCC meetings in the specified periodicity
- Participate in quarterly events (organised by NABARD) with stakeholders
District-level Credit Committee
- DLCC under the collector to review progress periodically
- Grievance redressal at district level
- Assist in resolving issues, if any, pertaining to public utility services and workspace for potential borrowers
Bank Branches
- Help potential borrowers in accessing the portal
- Process loan applications received online or in person
- Process loans with the timeframe as stipulated in the Code of Bank’s Commitment to SME borrower (application for loan up to Rs. 5 lakh (US$ 7,000) within 2 weeks, Rs. 5-25 lakh (US$ 7,000-35,000) in 3 weeks and above Rs. 25 (above US$ 35,000) in 6 weeks from the date of receipt of application, provided the application is complete and supplemented by the documents required
- In case of rejection, the reason must be made known to the borrower as specified in the Code of Bank’s Commitment to Customers
- Grievance redressal at the bank level should be done in 15 days at the bank level as per the Code of Bank’s Commitment to Customers
- Banks to put in place an internal mechanism for monitoring scheme performance
Borrowers
- Access the portal or visit a bank branch and answer a short set of questions
- If categorised as trainee borrower, go through the sequence of handholding support (as applicable)
- Arrange/provide requisite documentation as required by the bank branch
- Attend quarterly events on experience sharing, best practices, problem solving, etc.
- Set up and run the unit with due diligence
- Make repayments in due time
Stand Up India: Progress and Initiatives
Banks have sanctioned Rs. 63,496.11 crore (US$ 7.61 billion) to about 247,755 beneficiaries under the Stand Up India Scheme in the last five years since inception for promoting entrepreneurship among women and SCs & STs. As of March 23, 2021, the scheme has benefited 93,094 women entrepreneurs with an outstanding loan of Rs. 21,200 crore (US$ 2.83 billion). About 16,258 entrepreneurs belonging to the SC category have received loans worth Rs. 3,335.87 crore (US$ 445.73 million) and 4,970 entrepreneurs from the ST category have received loans worth Rs. 1,049 crore (US$ 140.16 million). The extension and increased allocation would help support women job seekers who got unemployed in the pandemic year and are seeking alternative sources of income, as the Indian economy is headed for recovery in 2021.
- The Stand Up India scheme, aimed at supporting SC/ST and women entrepreneurs, experienced flat growth in loan sanctions in FY24, with 39,643 loans approved compared to 39,907 in FY23, while disbursements dropped by 12% to 17,374 loans, highlighting challenges in accessing funds despite overall sanctioned loans reaching Rs. 62,390 crore (US$ 7.48 billion).
- A study conducted by IPE across six states (Telangana, Tamil Nadu, Kerala, Uttar Pradesh, Haryana, and Maharashtra) with a sample size of 2,100 revealed that the Stand-Up India scheme has generated employment and received a positive response from the community, particularly among women and marginalized groups.
- As of November 24, 2023, under the Stand Up India (SUPI) scheme, 84% of the total 2.09 lakh loans sanctioned have been allocated to women entrepreneurs, demonstrating the significant focus on empowering women in entrepreneurship initiatives.
- As of the last seven years, over Rs. 40,700 crore (US$ 4.89 billion) has been sanctioned to more than 1,80,630 beneficiaries under the Stand Up India Scheme.
- The scheme has been extended up to 2025 and encourages all bank branches to extend loans to these demographics for setting up greenfield enterprises.
- More than 1.8 lakh women and SC/ST entrepreneurs have been sanctioned loans exceeding Rs. 40,600 crore (US$ 4.87 billion).
- Stand Up India Scheme aims to create an ecosystem that supports the establishment of greenfield enterprises through access to loans from all Scheduled Commercial Banks.
As a part of media awareness and reporting, the following initiatives were taken up by the government to promote the scheme:
- A Start Up India Twitter Handle has been created
- An official website has been created and initiative to foster better awareness about Stand Up India has also been initiated
- Also, to encourage others, motivating stories will also be blogged everyday on the online web portal of the scheme
- To spread awareness about the scheme on social media platforms, a devoted Facebook page has also been set up
The Road Ahead
The Finance Minister, under the Union Budget 2019-20, announced an extension to Stand Up India scheme until 2025. As of February 2021, the scheme has expanded by 21.3% in terms of the number of loan applications sanctioned by lending institutions and increased by 21.1% in the amount sanctioned in the last one year. Observing phenomenal growth in the number of applicants and sanctioned loans, Stand Up India has certainly created a strong roadmap for welfare of women and the SC/ST population. This growth is likely to continue in future owing to the vast supportive and financial measures taken by the government to uplift the backward society.
Most women entrepreneurs (engaged in the co-operative and self-help group movements) are significantly contributing to the services sector. Intellectuals believe the government (through the Stand Up India scheme) can provide an institutional framework and support services to women to start entrepreneurship in the manufacturing sector too.
The SC & ST population needs to be educated and empowered further (socio-politically) to reap benefits of the Stand Up India scheme. If implemented with a supporting ecosystem, this scheme can indeed transform the socio-economic architecture of rural & urban India and realise the Gandhian directive principle of encouraging village and cottage industries.
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