Cabinet Extends Stand-Up India to March 2031 With ₹4,111 Crore Corpus

Synopsis

The Union Cabinet on Wednesday agreed to extend the Stand-Up India Scheme till 31 March 2031 for five years with the credit guarantee corpus of ₹4,111 crore. The scheme provides financial support to women and entrepreneurs of Scheduled Caste and Scheduled Tribe for establishing new business ventures with the objective of extending financial support to additional 2.5 lakh borrowers. The official's statement said it has helped entrepreneurs secure loans to more than 2.75 lakh so far since its launch in April 2016.

On Wednesday, the Union Cabinet led by Prime Minister Narendra Modi approved the extension of the Stand-Up India Scheme for another five years till 31st March 2031 with the credit guarantee corpus of ₹4,111 crore.

The scheme provides

Women and SC/ST entrepreneurs who are eligible to receive the loan can avail loans for greenfield for up to ₹1 crore. The source of loans is scheduled commercial banks. A credit guarantee corpus helps offset some of the risk on the part of the lender and is meant to promote loans to first-time borrowers without withholding collateral.

At first approval in 2016 the loans had a maximum term of seven years. No mention is made in the reports to the change in the repayment terms.

Track record and targets

The scheme is likely to help another 2.5 lakh entrepreneurs in the next five years. Since its launch in April 2016 it has facilitated loans to more than 2.75 lakh women, SC and ST entrepreneurs, according to the official statement.

After the Cabinet meeting, Union Minister Ashwini Vaishnaw briefed the media that the programme was aimed at empowering SC, ST and women entrepreneurs to become self-employed. The scheme would help women entrepreneurs, SC and ST entrepreneurs to avail loans and promote inclusive economic growth, the government said.

Related decisions

Similarly, the same Cabinet cycle involved renewal of credit support related to that. The Cabinet also decided to extend the Mudra credit guarantee plan, according to one report. The reports reviewed do not provide any specifics about the new corpus of Mudra.

What to watch

The new phase is set to achieve continuity and not expansion, as the target of 2.5 lakh further borrowers is lower than the 2.75 lakh achieved in the first decade. Official data on the rate of sanctions and loans disbursed, and loans to first-generation entrepreneurs, would indicate whether the guarantee is influencing bank behaviour. None were reported during the test period.