Cabinet Extends Stand-Up India Scheme Till 2031, Targets 2.5 Lakh New Entrepreneurs

NEW DELHI: In a major initiative aimed at expanding entrepreneurship and strengthening financial inclusion, 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 March 31, 2031.

The extended programme aims to provide financial assistance to at least 2.5 lakh additional entrepreneurs belonging to women, Scheduled Castes (SCs) and Scheduled Tribes (STs), enabling them to establish new businesses and become economically self-reliant.

As part of the decision, the Cabinet has also sanctioned a dedicated Credit Guarantee Corpus of ₹4,111 crore to strengthen the lending mechanism and encourage banks and other financial institutions to extend loans to eligible beneficiaries.

Union Minister for Information and Broadcasting Ashwini Vaishnaw announced the Cabinet’s decisions while briefing the media after the meeting.

Launched in April 2016, the Stand-Up India Scheme has already facilitated loans to more than 2.75 lakh women and SC/ST entrepreneurs across the country. The latest extension is intended to expand its reach and bring another 2.5 lakh beneficiaries into the formal banking and entrepreneurship ecosystem over the next five years.

LOANS UP TO ₹1 CRORE FOR NEW BUSINESS VENTURES

Under the scheme, eligible women and SC/ST entrepreneurs can obtain bank loans ranging from above ₹10 lakh to ₹1 crore for establishing greenfield enterprises, referring to businesses being set up for the first time by the borrower.

The financial assistance can be provided either through a composite loan covering working capital and term-loan requirements or through a term loan, depending on the nature of the proposed business.

Eligible borrowers can receive financial support covering up to 85 per cent of the total project cost, subject to the applicable scheme conditions.

MULTIPLE BUSINESS SECTORS COVERED

The scheme covers a wide range of economic activities, including manufacturing, services, trading and agriculture-allied sectors, providing aspiring entrepreneurs opportunities to establish businesses across different industries.

To reduce lending risks and facilitate greater participation by financial institutions, the government has also provided credit guarantee coverage of 85 per cent of the loan amount. The standard guarantee fee under the scheme has been fixed at 0.50 per cent.

The continuation of the programme is expected to improve access to institutional finance for communities that have traditionally faced difficulties in securing business loans, while encouraging self-employment, enterprise development and inclusive economic growth.

MUDRA CREDIT GUARANTEE FUND ALSO EXTENDED

Separately, the Union Cabinet approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for another five years until March 2031, with a corpus of ₹5,000 crore to facilitate lending under the Pradhan Mantri Mudra Yojana (PMMY).

According to official figures, lending institutions had sanctioned more than 60.36 crore loans amounting to ₹43.34 lakh crore under the Mudra programme as of September 2026.

The continuation of the credit guarantee mechanism is expected to further strengthen financial support for micro enterprises and expand access to institutional credit across the country.

The two decisions underline the government’s focus on promoting small businesses, encouraging entrepreneurship among underserved communities and strengthening India’s employment and economic development ecosystem.(KNC)