Cabinet Extends Stand-Up India Scheme Until 2031 with ₹4,111 Crore Credit Guarantee Corpus

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of the Stand-Up India Scheme for another five years, extending its implementation until 31 March 2031. The decision includes the approval of a ₹4,111 crore credit guarantee corpus and aims to provide financial assistance to at least 2.5 lakh additional entrepreneurs from women, Scheduled Caste (SC) and Scheduled Tribe (ST) communities.

Announced on 11 November 2026, the extension strengthens the government’s efforts to expand institutional credit access, encourage enterprise creation and support entrepreneurship among communities that have historically faced barriers to business financing. The scheme will continue to facilitate loans for establishing new enterprises across manufacturing, services, trading and agriculture-allied activities.

Five-Year Extension to Support 2.5 Lakh Entrepreneurs

The continuation of the Stand-Up India Scheme establishes a fresh five-year framework for expanding entrepreneurship among women and SC/ST communities. The government aims to facilitate financial assistance to a minimum of 2.5 lakh additional beneficiaries during this period, enabling more individuals to establish independent businesses and participate in India’s expanding entrepreneurial economy.

Since its launch in April 2016, the Stand-Up India Scheme has facilitated loans to more than 2.75 lakh women, Scheduled Caste and Scheduled Tribe entrepreneurs. The programme was introduced to address challenges in accessing institutional finance, particularly among individuals seeking to establish their first business ventures.

The latest extension builds upon this foundation by maintaining targeted credit support for new enterprises while strengthening the financial guarantee mechanism intended to encourage lending institutions to extend credit to eligible entrepreneurs.

Loans of Up to ₹1 Crore for New Enterprises

Under the continued scheme, eligible entrepreneurs can obtain loans exceeding ₹10 lakh and extending up to ₹1 crore for establishing greenfield enterprises. These are newly established business ventures rather than expansions of existing enterprises, reflecting the programme’s emphasis on creating additional entrepreneurial opportunities.

Financial assistance may be provided through composite loans combining term finance and working capital requirements or through standalone term loans. The loan amount can cover up to 85% of the total project cost, reducing the proportion of investment that entrepreneurs must arrange through other financial resources.

The scheme covers enterprises operating in manufacturing, services, trading and agriculture-allied activities. This broad sectoral coverage allows eligible entrepreneurs to pursue business opportunities ranging from small industrial and service establishments to commercial ventures and activities connected with agricultural production and processing.

₹4,111 Crore Credit Guarantee Corpus Approved

A major component of the Cabinet’s decision is the approval of a ₹4,111 crore credit guarantee corpus to support lending under the extended Stand-Up India Scheme. The guarantee mechanism is intended to reduce the credit risk faced by lending institutions when financing eligible entrepreneurial ventures.

Under the approved framework, credit guarantee coverage will extend to 85% of the loan amount, with a standard guarantee fee of 0.50%. This arrangement is designed to strengthen institutional confidence in extending financial assistance to eligible borrowers, particularly those entering entrepreneurship without an established business track record.

The credit guarantee corpus represents financial backing for the lending guarantee mechanism rather than a direct grant or subsidy distributed to individual entrepreneurs. Its purpose is to support the availability of institutional credit by providing protection against a specified proportion of potential loan defaults.

Strengthening Women-Led and Community-Based Entrepreneurship

The continuation of Stand-Up India places particular emphasis on promoting entrepreneurship among women and members of Scheduled Caste and Scheduled Tribe communities. Access to formal credit remains an important requirement for individuals seeking to establish businesses, acquire machinery, develop infrastructure and meet initial working capital needs.

By facilitating loans for newly established enterprises, the scheme seeks to encourage greater participation in productive economic activities and create opportunities for business ownership among eligible communities. The availability of institutional financing can also support the development of local enterprises, particularly in sectors where relatively modest capital investments can enable commercial operations.

The scheme’s coverage of agriculture-allied activities is particularly relevant to rural entrepreneurship, where opportunities exist in agricultural processing, service provision and related commercial enterprises. Similarly, its support for manufacturing, trading and services provides pathways for eligible beneficiaries to establish businesses across urban and semi-urban markets.

Supporting Inclusive Economic Growth

The Cabinet’s decision to extend Stand-Up India until March 2031 reinforces the role of targeted institutional credit in expanding India’s entrepreneurial base. By combining loans of up to ₹1 crore with an 85% credit guarantee mechanism, the programme seeks to address financing barriers faced by eligible entrepreneurs establishing new businesses.

With more than 2.75 lakh entrepreneurs having received loans since the scheme’s introduction in 2016, the latest extension aims to expand its reach by assisting at least another 2.5 lakh beneficiaries over the next five years.

The ₹4,111 crore credit guarantee corpus, continued eligibility across major economic sectors and renewed focus on women and SC/ST entrepreneurship collectively establish the framework for the scheme’s next phase. Its implementation is expected to contribute to enterprise creation, broader participation in business ownership and inclusive economic development.

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