• The Govt of India has recently approved the “Stand up India Scheme” to promote entrepreneurship among SC/ST and Women entrepreneurs.
• The Scheme is intended to facilitate at least two such projects per bank branch, on an average one for each category of entrepreneur.
• The scheme aims to benefit at least 2.5 lakh women and SC/ST entrepreneurs. The scheme has target of 2.5 lakh loan approvals within 36 months.
• The Stand Up India Scheme provides for:
a) Refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs. 10,000 crore.
b) Creation of a credit guarantee mechanism through the National Credit Guarantee Trustee Company (NCGTC).
c) 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 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. 100 lakh 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 for which Department of Financial Services would be the settler and National Credit Guarantee Trustee Company Ltd. (NCGTC) would be the operating agency.
• Margin money of the composite loan would be up to 25%. Convergence with state schemes is expected to reduce the actual requirement of margin money for a number of borrowers. o Over a period of time, it is proposed that a credit history of the borrower be built up through Credit Bureaus.