Credit Guarantee Scheme for Stand Up India (CGSSI)

In India, people belonging to minority categories, such as Scheduled Castes (SC), Scheduled Tribes (ST), and especially women are not able to compete in businesses/entrepreneurship because of lack of finance or funding. Considering their needs and requirements, the Government of India has launched the ‘Stand-up India’ scheme to support the SC/ST and women community by offering them a chance for entrepreneurship. This scheme is carried out under the directives of the Department of Financial Service (DFS), Ministry of Finance, and the Government of India.

CGSSI – Interest Rate & Eligibility

Credit Guarantee Scheme for Stand Up India
Interest Rate	As per bank’s MCLR + 3% + tenor premium
Age Criteria & Eligibility	Min. 18 years, SC/ST Women
Loan Amount	Min. Rs. 10 lakh – Max. Rs. 1 crore
Repayment period	Max. up to 7 years
Stake holding	At least 51% should belong to SC/ST or women entrepreneur
Collateral	Not required

This scheme allows an individual to apply for bank loans ranging from Rs 10 lakh to Rs 1 crore at minimum to at least one SC/ST borrower and at least one woman borrower per bank for setting up their enterprise. It can be manufacturing, services, or the trading sector. In the case of a group of people handling an enterprise, at least 51% of shares must belong to either SC/ST or must be a women entrepreneur.

Eligibility Criteria

• The applicant must be an SC/ST and Women entrepreneur and must be above 18 years
• The loan is only applicable for unfinished/underdevelopment/green-field projects either in the manufacturing, trading or service sectors
• It is mandatory for non-individual enterprises to have a minimum of 51% of the shares to be owned by SC/ST or Women Entrepreneurs
• The applicant should not be a defaulter in any bank or NBFC

Where to apply for CGSSI loan

The loan can be applied in following ways:

• By visiting the bank branch directly
• Stand-Up India official website
• By contacting Lead District Manager (LDM)

Loan Details under CGSSI

• The purpose of this loan is to encourage and enable the SC/ST/Women entrepreneurs to set their own business/enterprise in any of the three sectors:
  • Manufacturing
  • Service
  • Trading
• The amount sanctioned can range from Rs 10 lakh to Rs 1 Crore.
• The size of the loan is to compensate for about 75% of the project cost through term loans and working capital. If the applicant is getting support from any other scheme and exceeds 25%, then the loan sanctioning from CGSSI fails and is invalid.
• Drawing of working capital:
  • If a working capital of up to 10 lakh is required; it can be sanctioned in the form overdraft. Rupay debit card will be provided for the convenience of the applicant
  • If a working capital of more than ten lakhs is required; it can be sanctioned in the form of a Cash Credit limit
• The interest rate would be the lowest applicable rate of the bank for the category according to the rating, and it will not exceed the base rate (MCLR) + 3% + tenure premium
• Other than primary security, the loan can be sanctioned by using collateral security or Credit Guarantee Fund Scheme for Stand-up (CGFSIL) according to the bank
• The repayment period of the loan is 7 years, with a moratorium period of 18 months
• The loan applicant should be able to manage about 10% of the project cost as his/her contribution. The 25% margin of money will be provided with eligible central/state schemes

Apply for loan under CGSSI

1. The first step is to apply for a loan through the online portal where information on certain parameters is collected which concludes the initial registration process.
2. After answering the questions asked during the initial stage, the borrowers/applicants are categorized into two halves, as ‘ready borrower’ or a ‘trainee borrower’.
   1. Ready borrowers: – If the applicant can sustain the business without any handholding support and has experience then the loan can be sanctioned directly. The application number is provided which can be used to track the status of the loan application. Information about the applicant/borrower is sent to the concerned bank, the LDM and the offices of NABARD/SIDBI designated by Stand-Up Connect Centers. The loan application now can be tracked through the application number.
   2. Trainee Borrower: – If the applicant cannot sustain business on their own and handholding support is required. Then the applicant/borrower is linked to the LDM of the concerned district and the relevant office of NABARD/SIDBI. The LDM monitors the process of work until no more handholding support is required. In the following ways the support is provided:
      1. Financial training from FLCs (Financial Literacy Centers)
      2. Skill development from skill centers
      3. MSME development from institutes
      4. Schemes for margin money supported by related offices
      5. Expert mentoring support from established businesses
      6. Creating utility connections with the help of utility offices

Documentation required

• Proof of Identity: Voter’s ID card, Valid Passport, Driving License, PAN Card
• Address Proof/Business Address Proof: Telephone bill, Electricity bill, Property Tax receipt
• Partnership Deed
• Rent agreement, if the business location is on rent
• SSI/MSME registration
• Projected balance sheet for 2 years
• Photocopy of all deeds of the property being offered as collateral is required
• Documents to prove that the applicant belongs to SC/ST
• Certificate of incorporation from Registrar of Companies (ROC)
• Project reports, including all the details of assets, resources, production, sale, etc.
• Manufacturing process, if applicable

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