According to the 2011 census, India has about 201,378,372 individuals falling under scheduled caste category, out of which, approximately 97,843,058 are women. The census also reported an improvement of their educational level from 5.7% to 8.2%. It is on this note that the Ministry of Finance, Government of India, and Department of Financial Services anchored the Stand-Up India Scheme to promote entrepreneurship among scheduled tribes, castes, and women. This was done to encourage the emerging business interest on their end.
By 2017, this fund reached out to 33,321 General category women, 5,852 SC applicants, and 1,761 ST applicants through various banks. The sanctioned loan amount against this scheme can range between Rs. 10 Lakh and Rs. 1 Crore depending on the business venture requirement.
How to qualify for Stand-Up India Scheme?
This scheme offers loans that comprise both working capital and term loan ranging between Rs. 10 Lakh and Rs. 1 Crore.
However, borrowers need to have the following qualifications to be eligible to apply for this loan:
- Applicant must be of or above 18 years.
- She/he must belong to an SC/ST category or must be a woman.
- In case this scheme is being availed by a non-individual enterprise, it is mandatory that the company’s 51% shareholder is a woman, an SC, or an ST.
- This scheme is only available to fund greenfield projects. However, the trade may be a venture in any field – manufacturing or services.
- A borrower cannot be an existing defaulter in any financial institution.
The strict clauses put up in the list of required eligibility criteria make it tougher for customers to avail funds easily. On the other hand, leading NBFCs like Bajaj Finserv keep their eligibility criteria to avail a Business Loan simple and straightforward.
How to utilise this loan amount?
Women entrepreneurs face a lot more hurdles when it comes to getting funds for their start-ups. The GEDI (Global Entrepreneurship and Development Institute) stated that about 73% of women failed to obtain financing from Venture Capitalist. It is here that this scheme comes to use.
With composite loan coverage of 75% of the project cost, the sanctioned amount is enough to handle the majority of business expenses. Every startup should know how to organise business finances based on the available funds. The loan amount can be invested in buying the following:
- Purchase raw materials
- Hire/buy heavy duty machinery
- Lease workspace
- Boost working capital
- Hire skilled employees
- Upgrade official website
- Pay more attention to marketing
Moreover, the business loan interest rate in the case of this scheme is also comparatively low. The banks offering loans against this scheme cannot charge 3% above the lending rate.
Stand-Up India Scheme and business loans
This scheme targets the challenges faced by emerging SC, ST, and women entrepreneurs and can be accessed in 3 different ways:
- through their official portal
- through the Lead District Manager
- through the designated bank branch
However, this requires one to pledge collateral, providing which can be difficult for start-up companies. Hence, it is on this ground that customers seem to prefer the collateral-free Business Loan provided by reputed financial institutions like Bajaj Finserv who also provide added features and benefits like instant disbursal and flexible repayment tenors.
All you should do is submit a few necessary details to check your pre-approved offer. Stand-Up India Scheme focuses on converting job seekers to job creators. With 4200 start-ups present in India, the country’s GDP is counting on the growing business sector, and financial aids like this will boost the numbers further.