New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of the Stand-Up India Scheme for another five years, extending its implementation until March 31, 2031.
The extended scheme aims to provide financial assistance to an additional 2.5 lakh entrepreneurs belonging to women, Scheduled Castes (SCs) and Scheduled Tribes (STs), strengthening access to institutional credit and promoting entrepreneurship among underserved communities.
The Cabinet has also approved a Credit Guarantee Corpus of ₹4,111 crore to support the scheme’s lending framework and facilitate access to loans for eligible beneficiaries.
Launched in April 2016, the Stand-Up India Scheme has facilitated loans to more than 2.75 lakh women and SC/ST entrepreneurs so far.
Stand-Up India Scheme: Key Decisions Approved by the Cabinet
The latest Cabinet approval covers the continuation of the scheme, expansion of its beneficiary base and financial support through the credit guarantee mechanism.
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Key highlights include:
- Extension period: Five years, until March 31, 2031.
- Additional beneficiaries: At least 2.5 lakh entrepreneurs.
- Target groups: Women, Scheduled Castes and Scheduled Tribes.
- Credit Guarantee Corpus: ₹4,111 crore.
- Existing beneficiaries: More than 2.75 lakh women and SC/ST entrepreneurs have received loan support since the scheme’s launch in 2016.
The extension is intended to ensure continued access to formal credit for entrepreneurs seeking to establish new businesses.
Who Can Apply for Loans Under Stand-Up India?
The scheme primarily supports women and SC/ST entrepreneurs who intend to establish greenfield enterprises, meaning businesses being set up for the first time in the relevant sector.
Eligible borrowers must meet the prescribed conditions under the scheme.
The principal eligibility provisions include:
- Women entrepreneurs.
- Entrepreneurs belonging to Scheduled Castes.
- Entrepreneurs belonging to Scheduled Tribes.
- Eligible applicants seeking to establish a new enterprise in the manufacturing, services, trading or agriculture-allied sectors.
For non-individual enterprises, the prescribed ownership and controlling stake conditions apply to ensure that eligible women or SC/ST entrepreneurs retain the required level of ownership and control.
Loan Support of ₹10 Lakh to ₹1 Crore
Under the Stand-Up India framework, eligible borrowers can access bank loans ranging from above ₹10 lakh to ₹1 crore.
The financial assistance is structured to support both the establishment and operational requirements of a new enterprise.
Important loan provisions include:
- Loan amount: More than ₹10 lakh and up to ₹1 crore.
- Loan structure: Composite loan combining term loan and working capital, or term loan, as applicable.
- Project cost coverage: Loan support can cover up to 85% of the project cost, subject to the scheme’s eligibility and prescribed conditions.
- Eligible activities: Manufacturing, services, trading and agriculture-allied activities.
The scheme is designed to help first-time entrepreneurs meet their capital requirements without depending entirely on personal savings or informal sources of finance.
85% Credit Guarantee Coverage to Support Lending
An important component of the scheme is its credit guarantee mechanism, which is intended to encourage banks to extend loans to eligible entrepreneurs.
Under the approved framework:
- Credit guarantee coverage: 85% of the loan amount.
- Standard guarantee fee: 0.50%.
- Credit Guarantee Corpus: ₹4,111 crore approved by the Cabinet.
The guarantee mechanism provides a defined level of protection to lending institutions against eligible credit defaults, helping facilitate institutional lending to entrepreneurs who may otherwise face difficulties accessing finance.
Stand-Up India: More Than 2.75 Lakh Entrepreneurs Supported Since 2016
Since its launch in April 2016, the Stand-Up India Scheme has focused on expanding entrepreneurship among women and members of SC and ST communities.
Its lending framework seeks to address barriers to institutional finance, particularly for first-time entrepreneurs establishing greenfield enterprises.
The scheme also aims to promote economic participation by enabling beneficiaries to create businesses, generate employment and contribute to local economic activity.
With the latest extension, the government intends to support at least 2.5 lakh additional entrepreneurs over the next five years.
The continuation of the scheme, along with the ₹4,111-crore credit guarantee corpus, is expected to strengthen the financial framework for inclusive entrepreneurship through March 2031.
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