In India, it is observed that challenges have often weighed down entrepreneurs, especially women or members from the Schedule Caste/Schedule Tribe communities who wanted to acquire a loan to start their own undertaking. Nevertheless, a noble initiative, “the Stand-Up India Scheme,” was launched by Prime Minister Narendra Modi in April 2016, which addresses these difficulties experienced by the SC/ST communities and women.
The Stand-Up India Scheme intends to encourage entrepreneurship among women and SC/ST members. The initiative is moored by the Department of Financial Services (DFS), Ministry of Finance, Government of India. The Scheme offers monetary help (funded/non-funded) for working capital and procurement of fixed resources in manufacturing, services, or retail sectors. It provides “bank loans between Rs 10 lakh and Rs 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower at least one women borrower for each bank branch for setting up a Greenfield enterprise. In the 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.”
It covers all the Schedule Commercial banks branches and will be accessible in three possible manners: Directly at the branch, or through Stand up India Portal (standupmitra.in), or through the Lead District Magistrate (LDM). SC/ST and or women entrepreneurs over 18 years old are eligible. Loans under the Scheme are accessible for only “greenfield projects.” Greenfield in this context means, “the first time venture of the beneficiary in the manufacturing or services or trading sector.” For instance, “non-individual enterprises 51% of the shareholding and controlling stake ought to be held either by SC/ST and/or Women Entrepreneur.” The borrower ought not to be in default to any bank/monetary organization.
Furthermore, the www.standupmitra.in portal provides the likely borrower to enlist him/her for availing the loan under the Stand-Up India scheme. The borrowers based on the input parameters are categorized in the following: Ready Borrower – handholding backing is not required and application can be processed by the branch; Trainee Borrower – Handholding assistance will be given through SIDBI and NABARD offices before monetary support by the Banks. The LDMs will supervise the process and work with local offices of SIDBI/NABARD for problem-solving and facilitating bottlenecks. In light of Government of India rules and Bank’s current MSME loaning standards, the operational highlights of the Stand-Up India scheme are given beneath:
The Scheme is a composite loan that is comprehensive of term loans and working capital loans. It will cover to 75% of the venture cost. The Scheme ensures the “lowest applicable interest rate of the bank for that category that is well within (base rate * MCLR + 3% + tenor premium).” 25% margin can be furnished in confluence with eligible Central/State schemes. In all the cases, the borrower will be needed to acquire least of 10% of the undertaking cost as own commitment. “The composite loan is repayable in 7 years with a maximum moratorium period of 18 months.”
As far as security is concern, hypothecation of resources (stocks, receivables, work in progress, plant and apparatus, etc) is applicable. Besides, Equitable/registered mortgage of Land and Building liberated from any encumbrances for the sake of borrower/accomplice/director. Regarding guarantee, in the event that the “properties offered as security are in the name of the person(s) other than the borrower, the personal guarantee of every such proprietor/co-proprietors will be acquired. According to existing rules, in case of sole ownership concerns guarantee of spouse/major son(s) and in the event of companies, guarantee of director of the companies to be taken. Other than primary security, the loan might be tenable by “collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGSSI), nodal agency National Credit Guarantee Trustee Company, as decided by the bank.”
Schedule caste/ tribes experience the ill effects of excessive social, educational, and economic backwardness emerging out of the age-old practice of untouchability and the absence of infrastructure facilities and geological seclusion. They need exceptional consideration for protecting their wellbeing and expedite their socio-economic growth. The SC/ST populace should be instructed and socio-politically enabled to receive the rewards of this Scheme significantly. If the Scheme is executed with satisfactory ecosystem assistance, this scheme can, in fact change the socio-economic structure of our country, including rural areas. It would accomplice the “Gandhian Directive Principle” of empowering village and cottage industry ultimately and eloquently. Further, the greater part of the women entrepreneurs engaged with the joint movement development and self–help movement predominantly adds to the service sector. Specialists believe that the government, through this initiative, can give an institutional structure and support service to the women to make a start in the manufacturing sector as well. Thus, the Stand-Up India scheme is based on acknowledging the difficulties the SC, ST, and women entrepreneurs face in setting up ventures, acquiring a loan, and other assistance required occasionally to achieve success in business. The Scheme thereby makes an effort to develop an ecosystem that encourages and keeps providing a helpful atmosphere for doing business.
Photo Credit : https://www.rajras.in/stand-up-india-scheme/