India is a country brimming with talent, potential, and entrepreneurial spirit. However, for decades, large sections of its population, especially Scheduled Castes (SC), Scheduled Tribes (ST) and women, have faced significant barriers to accessing formal credit for starting their own businesses. Lack of collateral, limited exposure to formal banking systems, and social discrimination have restricted their entrepreneurial journeys.
Recognising this, the Government of India launched a revolutionary programme on 5th April 2016 — the Stand-Up India Scheme. This flagship initiative was introduced with a clear objective: to unlock the entrepreneurial energy of India’s marginalised communities by providing them access to institutional credit and support systems.
By extending collateral-backed loans between ₹10 lakh and ₹1 crore to eligible SC/ST and women entrepreneurs, the Stand-Up India Scheme aims to create a ripple effect that not only improves individual livelihoods but also uplifts entire communities by fostering self-reliance, employment generation, and economic empowerment.
This article explores the scheme in detail, its key features, benefits, eligibility, real-life impact stories, challenges, and why it remains one of the cornerstones of India’s push for inclusive growth.
What is the Stand-Up India Scheme?
The Stand-Up India Scheme is a government-backed initiative designed to facilitate bank loans to SC/ST and women borrowers for establishing greenfield enterprises. A greenfield enterprise means a first-time venture in the manufacturing, trading, or services sector, including activities allied to agriculture.
The primary purpose is to ensure that every bank branch in India supports at least one loan for an SC/ST borrower and one for a woman borrower. This mandatory outreach not only expands the formal credit net but also pushes banks to actively identify and support aspiring entrepreneurs who may not traditionally approach formal banking institutions for funding.
Unlike conventional business loans, which often require significant collateral, the Stand-Up India loan comes with a credit guarantee of up to 80% under the Credit Guarantee Scheme for Stand-Up India (CGSSI), reducing risk for both lenders and borrowers. This makes it much easier for first-time entrepreneurs to secure funding without pledging large assets.
Objectives of the Stand-Up India Scheme
The Stand-Up India Scheme was conceptualised with multi-dimensional objectives that align with India’s broader vision of inclusive economic growth.
1. Promote Entrepreneurship Among Marginalised Groups
By specifically targeting SC/ST communities and women, the scheme directly addresses long-standing social and economic inequalities. It empowers communities that have historically faced discrimination and limited access to formal financial systems.
2. Encourage Greenfield Enterprises
Focusing on greenfield projects ensures that fresh business ideas and ventures get the support they need to come to life. It encourages innovation, diversity of ideas, and the creation of new business ecosystems at the grassroots level.
3. Generate Employment and Strengthen Local Economies
New businesses mean new jobs. By supporting thousands of small businesses, the scheme stimulates local economies, creates employment opportunities, and reduces migration to urban centres in search of work.
4. Bridge the Credit Gap
The scheme also plays a crucial role in bridging the credit gap by mandating all banks to extend loans to the targeted beneficiaries. It institutionalises financial inclusion and ensures that no entrepreneur with potential is left behind simply due to lack of capital.
Who Can Apply?
The eligibility criteria for the Stand-Up India Scheme are designed to keep the process inclusive yet focused. Here’s who can apply:
- Scheduled Caste (SC) or Scheduled Tribe (ST) entrepreneurs: Individuals who belong to these communities and wish to start a new venture in the approved sectors.
- Women entrepreneurs: Women from any community can apply, provided they plan to start a new business venture.
The business must be a greenfield project, which means the enterprise should not already be operational. Existing businesses or expansions do not qualify.
In the case of partnerships or non-individual enterprises like LLPs or private limited companies, at least 51% of the shareholding and controlling stake must be held by an eligible SC/ST or woman entrepreneur. This ensures that the benefits reach the intended sections of society.
Loan Details and Key Features
Understanding the loan structure is crucial for anyone planning to apply under Stand-Up India. Here’s a detailed breakdown:
- Loan Amount: The scheme offers a composite loan — combining both term loan and working capital — ranging from ₹10 lakh to ₹1 crore.
- Margin Money: The borrower’s contribution (margin money) is up to 15% of the project cost, with the remaining amount covered by the bank and any available subsidies. The minimum margin required is 10% of the project cost.
- Repayment Period: Loans under the scheme are repayable in up to 7 years, with a maximum moratorium (grace period) of 18 months, providing breathing room for new businesses to stabilise.
- Interest Rate: As per the latest updates, the rate of interest is the External Benchmark Lending Rate (EBLR) plus 3.25%. For example, if the EBLR is around 8.9% (as of 2025), the effective rate comes to around 12.15%.
- Collateral and Guarantee: The loans are covered under the Credit Guarantee Scheme for Stand-Up India Loans (CGSSI), which provides up to 80% guarantee coverage, significantly reducing risk for both the borrower and the lending bank.
- Purpose: Funds can be used to start new businesses in manufacturing, trading, services, or activities related to agriculture. This wide scope ensures flexibility for diverse business ideas.
How to Apply for Stand-Up India
Applying for a loan under the Stand-Up India Scheme is straightforward, thanks to the Stand-Up Mitra Portal (www.standupmitra.in), which acts as a single-window digital platform for guidance and application.
Step 1: Visit the Portal
The Stand-Up Mitra Portal provides information, templates for project reports, training resources, and access to handholding agencies.
Step 2: Identify the Bank
Select your preferred bank branch or lending institution through the portal. You can connect with over 1.25 lakh bank branches nationwide.
Step 3: Prepare Your Business Plan
Create a clear, detailed project report outlining your business model, expected costs, projected revenues, and repayment plan. This is crucial for loan approval.
Step 4: Submit Application
Fill in the online application and submit supporting documents. Applicants can also visit the chosen bank branch for in-person assistance.
Step 5: Avail Handholding Support
The portal connects applicants with facilitators who assist with training, business planning, registration, and paperwork.
Impact of Stand-Up India
Since its launch, the Stand-Up India Scheme has made a tangible difference in the lives of thousands of entrepreneurs across India.
Over 1.8 lakh entrepreneurs have benefited, with more than ₹40,700 crore sanctioned in loans. Significantly, over 80% of these loans have gone to women entrepreneurs — highlighting the scheme’s role in closing the gender gap in India’s entrepreneurial ecosystem.
Success stories range from women-led handicraft businesses in rural Bihar, to SC-owned logistics startups in Maharashtra, to innovative service companies run by tribal youth in Odisha. Each new enterprise fuels job creation, inspires local communities, and sets a precedent for more inclusive growth.
Challenges Faced
While the scheme has had an impressive impact, it is not without challenges:
1. Limited Awareness: Many eligible entrepreneurs, especially in rural and semi-urban areas, are unaware of the scheme or how to access it.
2. Documentation Barriers: Preparing a robust business plan and arranging required documents can be daunting for first-time borrowers.
3. Bank Hesitancy: Some bank branches remain cautious about lending to first-time entrepreneurs due to perceived risks, leading to delays or rejections.
To overcome these challenges, the government continues to invest in awareness campaigns, digital literacy, and training programmes.
Complementary Schemes
Stand-Up India does not work in isolation. It complements several other government initiatives aimed at strengthening India’s entrepreneurial ecosystem:
- Startup India: Supports innovative startups with funding, tax exemptions, and incubation.
- Pradhan Mantri MUDRA Yojana (PMMY): Provides microloans up to ₹10 lakh to micro and small enterprises.
- Make in India: Encourages domestic manufacturing and industrial growth.
- Digital India: Expands internet access and digital literacy, which is crucial for online loan applications and running modern businesses.
Together, these initiatives form a robust framework for India’s goal of becoming a self-reliant and inclusive economy.
How to Make the Most of Stand-Up India
If you are an aspiring entrepreneur eligible for the Stand-Up India Scheme, here are a few practical tips to maximise your chances of success:
- Take the time to understand the scheme thoroughly by visiting standupmitra.in.
- Attend training workshops and webinars offered through the portal.
- Connect with local facilitators and financial literacy centres for help with project reports and documentation.
- Explore State and Central subsidies that can help reduce your margin money.
- Build a clear, feasible business plan that demonstrates your market understanding and repayment capacity.
Conclusion
The Stand-Up India Scheme is more than just a government programme — it is a transformative step towards an India where opportunities are not limited by gender or social background. By unlocking the entrepreneurial potential of SC/ST communities and women, it drives inclusive growth, uplifts families, generates employment, and fuels the dream of an Atmanirbhar Bharat (self-reliant India).
Whether you are an aspiring business owner, a policymaker, or simply a citizen interested in India’s growth story, the Stand-Up India Scheme stands as a testament to how targeted support can break barriers and open doors for millions.
