Editorial Today – Stand UP India Scheme

Stand up India

Background

• The Prime Minister on 15th August 2014 launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) for “Banking the Unbanked”.

• Further, Pradhan Mantri MUDRA Yojana (PMMY) was launched by the PM for “Funding the Unfunded” by facilitating loans upto Rs. 10 lakh on 8th April, 2015.

• To intensify this inclusive growth, the PM in his address to the nation on 15th Aug, 2015 had announced the “Start up India Stand up India” initiative.

• Stand up India is among the various financial inclusion and social security schemes introduced by the government.

Introduction

• The “Stand up India Scheme” is being launched now to promote entrepreneurship among Scheduled Caste/Schedule Tribe and Women for loans in the range of Rs. 10 Lakhs to Rs. 100 Lakhs.

• The Scheme is expected to benefit large number of such entrepreneurs, as it is intended to facilitate at least two such projects per bank branch (Scheduled Commercial Bank) on an average one for each category of entrepreneur.

• The Start-up India is different from the Stand-up India campaign. Former is related to new entrepreneurs while the later is a proposal restricted only to SC, ST, and Women entrepreneurs.

• The Stand-up India is component of Start-up India, Stand up India slogan anchored by Department of Financial Services (DFS) to encourage greenfield enterprises by Women and SC/ST entrepreneurs.

Objective

• The overall intent of the proposal is to leverage the institutional credit structure to reach out to these under-served sectors of the population by facilitating bank loans in the non-farm sector set up by such SC, ST and Women borrowers.

• The initiative will also develop synergies with ongoing schemes of other Departments.

The broad features of the scheme are as under:-

• Composite loan between Rs. 10 lakh and upto Rs.100 lakh, inclusive of working capital component for setting up any new enterprise.
• Debit Card (RuPay) for drawal of working capital.
• Credit history of borrower to be developed.
• Refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs.10,000 crore.
• Creation of a corpus of Rs. 5,000 crore for credit guarantee through National Credit Guarantee Trustee Company  (NCGTC). It will be the operating agency for the loan.
• Handholding support for borrowers with comprehensive support for pre loan training needs, facilitating loan, factoring, marketing etc.
• Web Portal for online registration and support services.

Who will lead the process?

• The process would be led by Small Industries Development Bank of India (SIDBI) with involvement of Dalit Indian Chamber of Commerce and Industry (DICCI) and various sector – specific institutions all over the country.

• The offices of SIDBI and National Bank for Agriculture and Rural Development (NABARD) shall be designated Stand Up Connect Centres (SUCC).

Road Ahead:
It is expected that this scheme would benefit atleast 2.5 lakh borrowers and expected date of reaching the target of approvals is 36 months from the launch of the Scheme.