Union Cabinet Extends Stand-Up India Scheme Until 2031 to Support 2.5 Lakh New Entrepreneurs

The Union Cabinet on Wednesday approved the continuation of the Stand-Up India Scheme for another five years, extending the program until March 31, 2031. The scheme is designed to help women, Scheduled Caste (SC), and Scheduled Tribe (ST) entrepreneurs establish new business ventures.

Announcing the decision during the Cabinet briefing, Union Minister Ashwini Vaishnaw stated that the program has experienced success in helping SC, ST, and women entrepreneurs start their own businesses, which led to the approval of its continuation.

Under the terms of the scheme, eligible entrepreneurs can access bank loans ranging from above Rs 10 lakh to up to Rs 1 crore. These funds are allocated for setting up new enterprises across manufacturing, services, trading, and agriculture-allied activities. Loans can be structured as term loans or a combination of term loans and working capital, covering up to 85 percent of the overall project cost.

To encourage lending institutions and reduce financial risk, the government has approved credit guarantee coverage of 85 percent of the loan amount. Additionally, the guarantee fee has been standardised at 0.5 percent without any additional risk premium.

The policy framework targets an average of two loans per bank branch, which includes at least one loan to a woman entrepreneur and another to an SC or ST entrepreneur. The initiative also extends operational support to entrepreneurs during the loan application process and subsequent stages of business development.

Launched initially in April 2016, the Stand-Up India Scheme has facilitated loans to more than 2.75 lakh women, SC, and ST entrepreneurs to date. The newly approved five-year extension, backed by a credit guarantee corpus of Rs 4,111 crore, aims to support an additional 2.5 lakh entrepreneurs. According to the government, the extended scheme will continue to improve credit access for underserved communities, foster the creation of new enterprises, and generate employment opportunities.

"The extension of the Stand-Up India Scheme provides crucial financial backing and credit risk mitigation for underserved segments of our economy. By securing institutional credit access and maintaining a standardized guarantee fee, this initiative removes significant barriers for women, SC, and ST founders. For the broader startup and small business ecosystem, such structured policy measures are essential to ensure inclusive growth, steady enterprise creation, and sustainable job generation across manufacturing, services, and agriculture-allied sectors over the coming years." — Dr. Shishir Gupta, Founder & CEO, StartupLanes