Stand-Up India Scheme for MSME
Stand-Up India Scheme facilitates loan for Enterprises in trading, manufacturing, or services. In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by an SC/ST or woman entrepreneur. The borrower should not be in default with any bank or financial institution.This scheme facilitates loans from Rs. 10 Lakhs to 1Crore.
- SC/ST and/or woman entrepreneurs, above 18 years of age.
- Loans under the scheme are available for only green field project. Green field signifies, in this context, the first time venture of the beneficiary in the manufacturing or services or trading sector.
- In case of non-individual enterprises, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur.
- Borrower should not be in default to any bank/financial institution.
To meet all kinds of credit requirement for setting up Greenfield projects under manufacturing, services or the trading sector.
Nature of Loan
Composite loan (inclusive of term loan and working capital) between 10 lakh and upto 100 lakh.
Size of Loan
Composite loan of 75% of the project cost inclusive of term loan and working capital. The stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost.
The rate of interest would be lowest applicable rate of the bank for that category (rating category) not to exceed (base rate (MCLR) + 3%+ tenor premium).
Security – Besides primary security, the loan may be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.
The loan is repayable in 7 years with a maximum moratorium period of 18 months.
For withdrawal of Working capital up-to 10 lakh, the same may be sanctioned by way of overdraft. Rupay debit card to be issued for convenience of the borrower. Working capital limit above 10 lakh to be sanctioned by way of Cash Credit limit.
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.
How to apply for loans
The scheme, which covers all branches of Scheduled Commercial Banks, will be accessed in three potential ways.
- Directly at the branch or
- Through Stand-Up India portal (www.standupmitra.in) or
- Through the Lead District Manager ((LDM)
Process for submission of loan applications
Information on certain parameters/ metrics of the borrower (obtained through a set of about 8-10 questions listed below) is collected through the initial registration process in the portal. Based on the information provided, feedback is provided to borrowers.
The approach of the Stand-Up India portal, for handholding is based on obtaining answers to a set of relevant questions at the initial stage. These would be typically be:
- Location of the borrower
- Category – SC/ ST/ Woman
- Nature of business planned
- Availability of place to operate the business.
- Assistance needed for preparing a project plan
- Requirement of skills/training (technical and financial).
- Details of present bank account.
- Amount of own investment into the project
- Whether help is needed to raise margin money
- Any previous experience in business
In case the borrower requires no handholding support, then the process of application for the loan at the selected bank can be done through the Stand-Up India portal (www.standupmitra.in) . At this stage an application number will be generated and information about the borrower shared with the bank concerned, the LDM (posted in each district) and the relevant linked office of NABARD/ SIDBI. The offices of SIDBI and NABARD shall be designated Stand-Up Connect Centres (SUCC). The loan application will now be generated and tracked through the portal.
In cases where the borrower indicates a need for handholding, then registration as a Trainee Borrower on the Stand-Up India portal (www.standupmitra.in will link the borrower to the LDM of the concerned district and the relevant office of SIDBI/ NABARD. This process which would be electronic could be done at the borrower’s home by himself/ herself.
SIDBI and NABARD as Stand-Up India Connect centres will then arrange for support for such trainee borrowers as requested in one or more of the following ways:
- For financial training – at the Financial Literacy Centers (FLCs)
- For skilling – at skilling centers ( Vocational Training Centers – VTPs/ Other Centers -OCs)
- For EDPs – at MSME DIs/ District Industries Centers (DICs)/ Rural Self Employment Training Institutes (RSETIs)
- For work shed – DICs
- For margin money – offices related to margin money support schemes e.g. State SC Finance Corporation, Women’s Development Corporation, State Khadi & Village Industries Board (KVIB), MSME-DIs etc.
- For mentoring support from established entrepreneurs – DICCI, Women Entrepreneur Associations, Trade bodies. Credible, well established NGOs can also be used for extending hand holding support.
- For utility connections – Offices of utility providers
- For DPRs – Project profiles available with SIDBI/ NABARD/ DICs
At any time, even after the loan has been sanctioned, any borrower may access the services of the Stand-Up Connect Centers.
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