The recent decision by the Ministry of Finance to extend the Standup India Scheme until 2025 is making headlines. Let’s delve deeper to understand what this scheme is about and its impact thus far.
Origins and Key Objectives
Launched in April 2016, the Standup India Scheme has been instrumental in promoting entrepreneurship at the grassroots level with a keen focus on economic empowerment and job creation. The primary aim of this initiative is to leverage the institutional credit structure to reach out to the underserved populace such as Schedule Castes (SCs), Schedule Tribes (STs), and Women Entrepreneurs.
Facilitating Bank Loans and Eligibility
The Standup India Scheme aims to extend bank loans ranging between Rs.10 lakh and Rs.1 crore. As per the guideline, each bank branch of Scheduled Commercial Banks must provide at least one loan to an SC or ST borrower and atleast one to a woman borrower for setting up a Greenfield enterprise. These enterprises can operate in sectors like manufacturing, services, or trading.
This scheme is designed to benefit SC/ST and/or women entrepreneurs aged above 18 years. The loans under the scheme are directed towards only Greenfield projects, which refer to undertakings built from scratch on unused land without any constraint from preexisting work, obviating the need for remodeling or demolishing existing structures. It’s important that borrowers should be devoid of any default history with any bank or financial institution. For non-individual enterprises, at least 51% of the shareholding and controlling stake must belong to either an SC/ST or Woman entrepreneur.
Recent Changes in the Scheme
In a bid to make the Standup India Scheme more entrepreneur-friendly, the margin money requirement for loans has been reduced from ‘up to 25%’ to ‘up to 15%’. In addition, activities that are allied to agriculture have also been included in the scheme’s purview.
Stand-Up Connect Centres (SUCC)
The Small Industries Development Bank of India (SIDBI) and National Bank for Agriculture and Rural Development (NABARD) offices serve as designated Stand-Up Connect Centres (SUCC). They provide assistance and guidance to potential entrepreneurs seeking loans.
Scheme Performance Analysis
Over the five years since its inception, the Standup India Scheme has proven to be quite successful. It is reported that banks have sanctioned Rs 26,204 crore to about 1,16,266 beneficiaries under this scheme. More impressively, the scheme has empowered more than 93,094 women entrepreneurs, underscoring the critical role it plays in promoting women entrepreneurship, and contributing towards the societal goal of gender balance in economic development.
These figures from the Press Information Bureau (PIB) only highlight the positive impact of the Standup India Scheme on Indian entrepreneurship landscape, and with the recent extension, it is poised to continue its momentum in driving entrepreneurship-led growth.