The Union Cabinet on Wednesday cleared a five-year extension of the Stand-Up India scheme, keeping one of the government’s flagship entrepreneurship programmes running till March 31, 2031. The decision, announced after the Cabinet meeting chaired by Prime Minister Narendra Modi, comes with a credit guarantee corpus of Rs 4,111 crore and a target of reaching at least 2.5 lakh additional entrepreneurs over the next five years.
For women and entrepreneurs from Scheduled Castes and Scheduled Tribes, the scheme remains one of the few windows where a first-time business owner can walk into a bank and ask for a loan of Rs 10 lakh to Rs 1 crore to set up a greenfield enterprise. The extension means that window stays open, with the government standing behind the lending.
What the Cabinet decided
Announcing the decision at the Cabinet briefing, Union Minister Ashwini Vaishnaw said the programme had been designed to help SC, ST and women entrepreneurs start their own businesses, and that its success was the reason the Cabinet approved its continuation for another five years.
The key numbers in the decision are straightforward. The scheme will run till March 31, 2031. The credit guarantee corpus approved for the period is Rs 4,111 crore. The guarantee will cover 85 per cent of the loan amount, with a standardised guarantee fee of 0.5 per cent and no additional risk premium. The target is financial assistance to at least 2.5 lakh additional entrepreneurs from among women, SC and ST communities.
The Cabinet also approved the continuation of the Credit Guarantee Fund for Micro Units (CGFMU) for five years, till March 31, 2031, with a corpus of Rs 5,000 crore. The fund provides credit guarantee cover to lending institutions against default risk on loans under the Pradhan Mantri Mudra Yojana, and the government expects it to facilitate Rs 12.6 lakh crore of lending over the next five years.
How Stand-Up India works
Launched in April 2016, Stand-Up India provides bank loans of above Rs 10 lakh and up to Rs 1 crore to women and SC/ST entrepreneurs setting up new businesses. Each bank branch is expected to finance at least one such enterprise, and the loans are meant for greenfield ventures, businesses built from scratch rather than expansions of existing ones.
The credit guarantee is the part that makes banks willing to lend. When a first-time entrepreneur with no collateral and no credit history applies, the guarantee absorbs much of the lender’s risk, covering 85 per cent of the loan amount. That is why the Rs 4,111 crore corpus matters: it is the backing that lets the lending happen at scale.
According to the government, the scheme has so far facilitated loans to more than 2.75 lakh women, SC and ST entrepreneurs since its launch. The fresh five-year extension is meant to build on that base, bringing another 2.5 lakh entrepreneurs into the formal credit and enterprise ecosystem by March 2031.
Why the extension matters now
The timing is significant. Small businesses have been absorbing much of India’s job creation in recent years, and access to formal credit remains the single biggest hurdle for first-time entrepreneurs, especially in smaller towns and rural areas. A loan of Rs 10 lakh to Rs 1 crore is the range in which a manufacturing unit, a service business or a retail venture typically gets off the ground.
The extension also sits alongside the wider set of decisions taken by the Cabinet on Wednesday, which included fertiliser subsidies for the Rabi season and an extension of the Noida Metro Aqua Line. Taken together, the decisions signal a push on both farm support and small-enterprise lending in the same sitting.
For aspiring entrepreneurs, the practical message is simple: the scheme is not winding down. Banks will continue to lend under it, the guarantee cover stays in place, and the target of 2.5 lakh new beneficiaries gives branch-level lending a clear number to work towards.
What applicants should know
- Who can apply: Women entrepreneurs and entrepreneurs from Scheduled Castes and Scheduled Tribes setting up a greenfield enterprise.
- Loan size: Above Rs 10 lakh and up to Rs 1 crore, through scheduled commercial banks.
- Guarantee cover: 85 per cent of the loan amount, with a standard guarantee fee of 0.5 per cent.
- Scheme valid till: March 31, 2031, following the Cabinet approval on November 11, 2026.
- Where to apply: At a bank branch, under the Stand-Up India window; the guarantee is arranged through the lending institution.
FAQs
What is the Stand-Up India scheme?
It is a government scheme that helps women and SC/ST entrepreneurs set up new businesses with bank loans of above Rs 10 lakh and up to Rs 1 crore for greenfield enterprises.
Till when has the scheme been extended?
The Union Cabinet on November 11, 2026 approved its continuation for five years, till March 31, 2031.
How much is the credit guarantee corpus?
The Cabinet approved a credit guarantee corpus of Rs 4,111 crore, with guarantee coverage of 85 per cent of the loan amount.
How many new entrepreneurs will the extension target?
At least 2.5 lakh additional entrepreneurs from among women, SC and ST communities over the next five years.
How many people has the scheme helped so far?
According to the government, more than 2.75 lakh women, SC and ST entrepreneurs have received loans under the scheme since its launch in April 2016.
The extension gives first-time entrepreneurs five more years of a clear, backed route into formal credit. For anyone planning a new venture, the next step is a conversation with their bank branch.
