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Stand up India Scheme for Financing SC/ST and/or Women Entrepreneur

By gkkedia Dt. June 1st, 2020

What the Scheme Says :

  • Aims at providing bank loans having range of Rs.10 lakh – Rs.1 crore.
  • To at least one Scheduled Caste(SC) and scheduled tribe(ST) borrower and at least one woman borrower (above 18 years of age) per bank branch for setting up a greenfield enterprise.
  • Greenfield enterprise signifies the first venture of beneficiary. Infrastructure will be built on unusual lands requiring no demolition or remodeling.
  • In case of non individual enterprise, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or women entrepreneur.
  • Borrower should not be in default with any bank or financial institution.
  • This scheme is focused to benefit at least 2.5 lakh borrowers and each enterprise will in addition provide job opportunities.
  • The stand-up India programme provides a digital platform based on three pillars to support enterprises among entrepreneurs from SC, ST and women category through.
  • Handholding support, Providing financial information & Credit Guarantee.

 
Documents necessary for Availing Loan:
The documentation requirements for availing of the loan under the scheme , and the are as under:

  • Valid photo identity proof acceptable to the bank.
  • Any valid address proof document of the individual and Business firm.
  • MOA and AOA of the Company.
  • Partnership deed in the case of a partnership firm.
  • Copies of the lease deeds.
  • Copy of the Rent Agreement.
  • The Balance Sheets of last three years of the associate/ group companies (if any).
  • Assets and Liability statements of both the borrower and the guarantor.

 
Past Report of the scheme :
According to the given statistics over the years, there are very few banks and financial institutions which are working in this direction and have provided no. of loans to the entrepreneurs/applicants. There are twenty one public sector commercial banks, forty two regional banks and nine private sector banks who have provided loans to the entrepreneurs. Till now around 1 lakh loans have been issued to general category women entrepreneurs, SC/ST individuals. The average amount disbursed to women entrepreneurs is around 14 lakhs and to SC/ST individuals it is 11 lakhs, as per said reports. There are also some regional rural banks who have not given even a single loan to the SC/ST or women entrepreneurs.

Stand Up India Scheme FAQs:

1. What should be done when requirement of loan is less than minimum loan amount which is Rs.10 lakh under Stand Up India scheme? The Government of India has initiated the Mudra Scheme (Micro Units Development & Refinance Agency ltd.) with three types of loan under Sishu, Kishore and Tarun for credit requirement where the loan amount is below Rs.10 lakhs.
2. Differentiation between Stand Up India Scheme and Start-Up India Scheme? While the former is restricted to facilitating loans by financial institutions from Rs.10 lakhs to Rs. 1 crore for greenfield projects promoted by SC / ST and women entrepreneurs, the latter aims to boost and support new or existing enterprises using innovative technology.
3. What are the key features of the Scheme? Key features of the scheme :

  • The life of enterprise should be less than five years from the date of its incorporation.
  • Its turnover in any financial year does not exceed Rs.25 crores.
  • It promotes innovative technology and new products.
4. What are the other benefits of the scheme? Apart from the submission of application form at the dedicated SIDBI portal for linking the prospective borrowers to the banks, it also provides for various services like hand holding support, skill development training, mentoring, generation of project reports, filing of applications, subsidies etc.
5. What rate of interest will be chargeable? The rate of interest would be lowest applicable rate of that particular category. (Base rate MCLR + 3% tenor premium.)
6. What is the margin money required to be invested by the entrepreneurs? The scheme envisages 25% margin money which can be provided in convergence with eligible Central/State schemes. While such schemes can be drawn upon for availing admissible subsidies or for meeting margin money requirements, in all cases, the borrower shall be required to bring in minimum of 10% of the project cost as own contribution .


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