Have an idea for a business but stuck on how to fund it? Maybe it is a small manufacturing unit, a bakery, or a tech product that needs its first round of money. Many first-time founders start their search with the Stand-up India scheme. But it is not the only government-backed route available.
India has several loan and funding schemes built for different kinds of businesses. Some suit tiny shops, while others are meant for tech start-ups. This guide covers how the scheme works, then looks at five alternatives and who each one suits.
What Is the Stand-up India Scheme?
The Stand-up India scheme was launched in April 2016 to support entrepreneurship among women and Scheduled Caste and Scheduled Tribe (SC/ST) communities. It offers bank loans between ₹10 lakh and ₹1 crore for setting up a new business.
The loan is meant for greenfield projects, which means first-time ventures. These can be in manufacturing, services, trading, or activities allied to agriculture.
Is Stand-up India Scheme Still Open?
The original Stand-up India scheme ended on 31 March 2025. The Union Budget 2025-26 announced a new scheme with term loans of ₹2 crore. It targets 5 lakh first-time women, SC, and ST entrepreneurs. The Finance Minister told the Lok Sabha in March 2026 that a revamped version is being prepared for Cabinet approval.
Applicants can check the latest status on the Stand-Up Mitra portal or with their bank.
5 Alternative Government Schemes to Explore
- Pradhan Mantri Mudra Yojana (PMMY)
Mudra loans are made for non-corporate, non-farm micro and small enterprises. They are collateral-free and offered through banks, small finance banks, NBFCs, and microfinance institutions.
The scheme has four categories based on the stage of the business:
| Category | Loan Amount |
| Shishu | Up to ₹50,000 |
| Kishore | Above ₹50,000 up to ₹5 lakh |
| Tarun | Above ₹5 lakh up to ₹10 lakh |
| Tarun Plus | Above ₹10 lakh up to ₹20 lakh |
Tarun Plus is open only to borrowers who have taken and fully repaid a Tarun loan. It suits small traders and shop owners who need modest funding.
- Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP helps people set up new micro enterprises with a government subsidy. It is run by the Khadi and Village Industries Commission (KVIC).
Key features include:
- Project Cost: Up to ₹50 lakh for manufacturing and ₹20 lakh for business or service units
- Subsidy: 15% to 35% of the project cost
- Higher Subsidy for Special Categories: 35% in rural areas and 25% in urban areas for groups such as SC/ST and women
- Eligibility: Individuals above 18 years
- Education: Class VIII pass for manufacturing projects above ₹10 lakh and service projects above ₹5 lakh
Only new projects qualify for PMEGP. It works well for founders who want a subsidy to reduce their overall loan burden.
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
CGTMSE is not a loan by itself. Instead, it guarantees loans given by banks and other member lenders to micro and small enterprises. This allows businesses to borrow without collateral or a third-party guarantee.
The guarantee ceiling has been raised to ₹10 crore. It suits growing businesses that need larger loans without pledging assets.
- Credit Guarantee Scheme for Startups (CGSS)
CGSS is part of the wider Start-up India scheme framework. It gives a credit guarantee to lenders who fund startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).
| Feature | Details |
| Maximum Guarantee | ₹20 crore per borrower |
| Eligible Borrowers | DPIIT-recognised startups not in default |
| Covered Instruments | Venture debt, working capital, debentures, and other debt |
| Guarantee Cover | 85% for loans up to ₹10 crore, 75% above ₹10 crore |
| Where to Apply | Jan Samarth portal or participating lenders |
It suits startups that need debt to scale.
- Self Reliant India (SRI) Fund
The Self Reliant India (SRI) Fund is a mother-fund mechanism set up by the central government to inject growth capital into micro, small, and medium enterprises (MSMEs). Managed by NSIC Venture Capital Fund Limited (NVCFL), a daughter fund structure provides equity and quasi-equity funding directly to promising, high-growth business units.
| Feature | Details |
| Funding Type | Indirect equity and quasi-equity investment via daughter funds |
| Target Sector | Micro, small, and medium enterprises (MSMEs) across manufacturing and services |
| Eligibility Criteria | Registered MSMEs with established business models and strong expansion potential |
| Where to Apply | Pitch directly to participating daughter funds listed under the SRI Fund framework |
How Should Founders Choose the Right Scheme?
The right choice depends on the funding need, the business stage, and eligibility.
- Check the Funding Need: Smaller amounts often fit Mudra, while larger needs suit CGTMSE-backed loans.
- Consider the Business Stage: Early ideas suit SISFS, while scaling startups may look at CGSS.
- Look at Eligibility: Women and SC/ST founders can track the revamped Stand-up India scheme.
- Prepare Documents Early: A clear project report and KYC documents help in every case.
Entrepreneurs who want to understand how to apply MSME certificate can review the Udyam registration process before applying for schemes that require enterprise registration.
Start Your Investment Journey Today
The Stand-up India scheme has helped many women and SC/ST founders take their first step. Alongside it, schemes like Mudra, PMEGP, CGTMSE, CGSS, and SISFS cover different stages and funding needs.
For those ready to move ahead, a conversation with a trusted financial institution like HDFC Bank is a good next step
