Stand-up India scheme, launched on April 05, 2016 ensures that women and scheduled caste/tribe entrepreneurs had a fair chance of setting up businesses on their own. The scheme, kick-started by the government gives budding SC/ST and women entrepreneurs a chance to make it big with their business ventures.Under this new scheme, eligible candidates can avail this loans ranging from Rs. 10 Lakh to Rs. 1 Crore. According to the Government of India, most women in our country including SC/ST are mostly underprivileged. So, with this new scheme, they will finally have a shot at starting a new business. Moreover, in recent years, the women in this country including those of backward classes are upcoming fast. So, this scheme will help them out by providing loans to set-up new ventures.
Why do women entrepreneurs need this loan?
Women entrepreneurs in this country face difficulties to avail external funds for start-ups. According to a survey conducted by GEDI (Global Entrepreneurship and Development Institute), female entrepreneurs mostly from SC/ST category ranked among the lowest out of 30 countries.Furthermore, more than 70% of women entrepreneurs failed to avail funds from venture capitalists. Thereafter, a study on Karnataka women exposed that almost 90% of females relied on personal capital to open up a new business. More than 68% found it difficult to avail loans approved from financial institutions. However, this scenario changed under the Stand up India scheme after it came into effect.Further, leading non-banking financial institutions like Bajaj Finserv joined this bandwagon, providing easy-to-avail Business Loans at attractive business loan interest rates for SMEs and MSMEs.
This scheme supports refinancing options
Another benefit of procuring loans from this scheme is the refinancing option it provides. It not only assists in the nascent stages of entrepreneurship but also to existing businesses as well.The Government of India initiated this refinancing option through loans from Small Industries Development Bank of India (SIBDI). Along with this composite loan, the female business owners will also be handed with debit cards.All you need to do to avail such schemes is to provide the necessary information to apply for a business loan.
How stand-up scheme scored so far?
Self-employed females from the low-skill sector benefited the most from this scheme. However, women from higher-income entrepreneurships still ranked low. Thus, to increase this number, Stand-up India scheme started at least 2 entrepreneurship projects at every bank branch in India. According to an official statement, almost 2.5 Lakh potential borrowers will benefit from this scheme.
How to qualify for this scheme?
To be eligible for this stand-up scheme, borrowers must meet the following criteria –
Women and SC/ST applicants must be at least 18 years of age.
This scheme is applicable only for greenfield projects.
For non-individual enterprises, at least 51% of shareholding must be held by a woman or SC/ST entrepreneur.
The borrower must not be a defaulter as per their financial portfolio.
Nature of loans under Stand-up Scheme
Under this scheme, a composite loan from Rs. 10 Lakh up to Rs. 1 Crore will be provided to set up new enterprises by women and SC/ST entrepreneurs or both. This loan (inclusive of term loans and working capital) would bear 75% of the total project cost. The interest rate has been kept at a minimum. However, these loans are provided by either maintaining collateral security or a guarantee from the CGFSIL as per financial institutions.However, as a female entrepreneur, you should know how to get collateral-free business loans. Leading NBFCs like Bajaj Finserv provide these loans with minimal hassles and straight-forward eligibility. Another advantage of these is instant disbursal of loans, flexible repayment tenors other than attractive business loan interest rates. According to The Financial Times, the number of women entrepreneurs is fast growing under this Stand-up Scheme. The new enterprises shot up from 2275 back in FY 2012 to over 30000 in FY 2018. With this strong nation-wide presence, India’s business sector is booming and is slated to rise more in the upcoming years.