The Union Cabinet today approved the Stand Up India Scheme to promote at least 2.5 lakh scheduled caste, scheduled tribes, and women entrepreneurs through banks.
The Stand Up India Scheme will be a refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs 10,000 crore.
"The Scheme is intended to facilitate at least two such projects per bank branch, on an average one for each category of entrepreneur. It is expected to benefit at least 2.5 lakh borrowers," an official statement said after the Cabinet meeting, chaired by Prime Minister Narendra Modi.
The expected date of reaching the target of at least 2.5 lakh approvals is 36 months from the launch of the Scheme, said the statement.
It entails creation of a credit guarantee mechanism through the National Credit Guarantee Trustee Company (NCGTC).
Besides, the Scheme will be a handholding support for borrowers both at the pre loan stage and during operations.
"This would include increasing their familiarity with factoring services, registration with online platforms and e-market places as well as sessions on best practices and problem solving", the statement said.
Government said the overall intent of the approval is to leverage the institutional credit structure to reach out to these under-served sectors of the population by facilitating bank loans repayable up to 7 years and between Rs 10 lakh to Rs 1 crore for greenfield enterprises in the non farm sector set up by such SC, ST and women borrowers.
The loan under the scheme would be appropriately secured and backed by a credit guarantee through a credit guarantee scheme.
The Department of Financial Services would be the settler and National Credit Guarantee Trustee Company Ltd (NCGTC) would be the operating agency.
Under the Scheme, the margin money of the composite loan would be up to 25 per cent.
"The convergence with state schemes is expected to reduce the actual requirement of margin money for a number of borrowers," it said.
Over a period of time, credit history of the borrower be built up through Credit Bureaus.
The 'Start up India Stand up India' initiative was announced by the Prime Minister in his address to the nation on August 15, 2015.
The Stand up India component is anchored by Department of Financial Services to encourage greenfield enterprises by SC/ST and women entrepreneurs.
