Stand-Up plan mimics Mudra
Centre will guarantee more than Rs 1 lakh crore worth loans to micro and small units.
By : DC Correspondent
Update: 2016-01-06 19:06 GMT
New Delhi: The Union Cabinet on Wednesday approved the “Stand-Up India Scheme” to promote entrepreneurship among SC/ST and women entrepreneurs. The scheme will facilitate bank loans of Rs 10 lakh to Rs 1 crore for greenfield enterprises in the non-farm sector set up by SC, ST and women borrowers. These loans will have a maximum tenure of seven years.
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. The Centre is looking to achieve the target of at least 2.5 lakh approvals in 36 months from the launch of the scheme.
The loan under the scheme would be appropriately secured and backed by a credit guarantee through a credit guarantee scheme for which the department of financial services would be the settlor and the National Credit Guarantee Trustee Company (NCGTC) would be the operating agency.
The scheme provides for refinance window through Sidbi with an initial amount of Rs 10,000 crore. The scheme also provides for 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 Cabinet has also given its approval for the creation of a Credit Guarantee Fund for Micro Units Development Refinance Agency (MUDRA) loans and to convert MUDRA into MUDRA Small Industries Development Bank of India (SIDBI) Bank as a wholly owned subsidiary of SIDBI. The fund is expected to guarantee more than Rs 1 lakh crore worth of loans to micro and small units in the first instance.
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