Out of all the businesses owned by Indians, only 13.76% are owned by women entrepreneurs, according to the latest data released by Forbes. As of March 31, 2022, only 6.8% of the MSME (Micro, Small & Medium Enterprises) units are owned by the individuals belonging to Scheduled Castes (SC), and around 2.1% by people from the Scheduled Tribes (ST) community.
These numbers were even lower in the last decade, and therefore, to motivate women and individuals from backward classes to start their businesses, the Government of India launched the Stand-Up India Scheme. So, what is the exact Stand Up India Scheme launch date? And what does the scheme aim to achieve? Let’s find out!
What is Stand Up India Scheme Launch Date?
Stand Up India Scheme's launch date was on April 05, 2016. The government inaugurated the scheme to provide financial support to women and individuals from the SC and ST communities for setting up businesses. The Stand-Up India Scheme loan amount ranges from Rs. 10 Lakh to Rs. 1 Crore.
Under the scheme, all bank branches must disburse a Stand-Up India Scheme loan to at least one woman, one individual from the SC community, and one from the ST community.
Stand Up India Scheme Eligibility
Now, after learning about the Stand-Up India Scheme launch date and the
Stand Up India Scheme loan amount, let’s read about the Stand-Up India Scheme eligibility criteria -
- The beneficiary must be at least 18 years old.
- The borrower under the scheme must be either a woman or a member of the SC or ST community.
- The applicant must own at least a 51% controlling stake in a greenfield enterprise.
- The individual must not be a defaulter at any bank or financial institution.
In case the application to the scheme is made by non-individual enterprises, a controlling stake of at least 51% must rest with either a woman or an SC/ST community member.
Documents Required for Applying Under Stand Up India Loan Scheme
The following documents must be submitted while making an application under the Stand-Up India Loan Scheme -
- Identify Proof such as Aadhaar Card, Voter’s ID Card, Driving License, Passport, PAN Card, etc.
- Residence Proof such as a utility bill, property tax receipt, bank passbook, etc.
- Business Address Proof such as Certificate of Incorporation, GST certificate, MSME certificate, etc.
- Company’s rent agreement, if its activities are operated on a rented property and Pollution Control Certificate, if applicable.
- Company’s Memorandum of Association (MOA), Articles of Association (AOA), Partnership Deed, etc.
- The company’s Incorporation Certificate and Registrar of Companies (ROC).
- Latest Income Tax Returns (ITR) of the company’s promoters and guarantors along with their statement of assets and liabilities.
- The company’s next 2 years’ projected balance sheets (if it works with working capital limits) and the period of the term loan (if taken).
- A copy of title deeds or lease deeds of all the properties owned by the business as collateral.
- SC/ST caste certificate, if applicable.
Features of Stand-Up India Loan Scheme
Now, after knowing about the Stand-Up India eligibility, one must know the key features of the scheme -
1. Nature of Credit
The loan offered under the Stand-Up India Loan Scheme is a composite credit which can be a mixture of a Term Loan and a Working Capital Loan.
2. Loan Size
Under the scheme, the loan amount can be up to 85% of the project cost. However, for this to be applicable, the borrower should not benefit from any other schemes providing for more than 15% of the cost of the greenfield project.
3. Requirement of Collateral
To avail of the loan, the applicant must provide primary security along with collateral as deemed required by the bank. The prospective borrower can also provide a guarantee from the Credit Guarantee Fund Scheme set up for the Stand-Up India initiative.
4. Loan Repayment
Borrowers must repay the loan in a maximum period of 7 years.
5. Moratorium Period
The moratorium period under the scheme can be up to 18 months.
What is the Stand-Up India Loan Interest Rate?
The Stand-Up India Loan interest rate is the lowest bank loan interest charged by financial institutions for women, SC, and ST individuals. However, the Stand-Up India Loan interest rate cannot exceed an upper limit which is the base rate MCLR + 3% + tenure premium.
Stand Up India Scheme Benefits
This scheme has been mandated to enable women and individuals from the SC and ST communities to set up greenfield enterprises in a bid to improve the country’s employment rate and GDP. A greenfield enterprise is a venture where an individual is entering into a particular sector for the first time for work purposes. Thus, their entry into the industry is not constrained by their previous work experience. These enterprises may belong to sectors like manufacturing, services, trading, and those related to agriculture and allied activities.
To date, the government has received a total of 1.63 Lakh applications under the scheme, and as many as 1.43 Lakh loans have been sanctioned. The government has, so far, disbursed loans worth a total of INR 3.8 Lakh Crore under the initiative with the help of 81 lenders.
Tax Benefits Available Under Stand Up India Scheme
Besides uplifting the socio-economic environment in the country, the scheme also provides the following tax benefits -
- A rebate of 80% is provided to the applicant after submission of the application form for patent registration.
- The scheme comes with the benefit of a Credit Guarantee Fund, which allows the entrepreneurs to enjoy relaxation in their income tax for at least the first 3 years.
- The beneficiary entrepreneurs under the scheme are exempted from having to pay Capital Gains Tax.
- The benefit of tax redemption on earned profits is also available to the beneficiaries under the scheme.
All these tax benefits are offered by the government under the scheme to shied women and SC/ST entrepreneurs from heavy tax liabilities during the initial phase of their business venture.
Takeaway
The Stand-Up India Scheme is a boon for women entrepreneurs and business enthusiasts from the SC and ST communities who cannot secure a business loan from a bank or financial institution. With Tata Capital, any entrepreneur, whether eligible under this scheme or not, can realise their dream of starting their venture by availing of our business loan solutions.
At Tata Capital, one can get the required credit for starting or supporting a business without collateral by completing a straightforward documentation process. Our business loans range from Rs. 5 Lakh to Rs. 75 Lakh and are available at an interest rate starting from 19% per annum for a tenure ranging from 12 to 36 months.
27 July 2022
6 mins read
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