In a significant policy expansion, the Government of India has announced that sole proprietors are now eligible for funding under the Stand-Up India Scheme, a flagship initiative aimed at promoting entrepreneurship among women, Scheduled Castes (SC), and Scheduled Tribes (ST). This development marks a major shift in the scheme’s operational framework, which previously prioritized private limited companies and partnership firms. By including sole proprietors, the government intends to widen access to institutional finance for individual entrepreneurs, particularly those from socially and economically marginalized backgrounds.

Under the updated guidelines, eligible sole proprietors can now avail of loans ranging from ₹10 lakh to ₹1 crore for setting up new greenfield enterprises in the manufacturing, services, trading, or agri-allied sectors. The loans will continue to be provided by scheduled commercial banks and will include both working capital and term loan components. As with other categories, applicants must be above 18 years of age and belong to SC/ST or be a woman entrepreneur. The sole proprietorship must be the first business venture of the applicant, and the borrower must not be a defaulter to any bank or financial institution.

To ease the application process, the Stand-Up India digital portal has been updated to support sole proprietor registrations. Additionally, the government has instructed banks to provide handholding support for documentation, project report preparation, and Udyam registration. Officials from the Department of Financial Services highlighted that this change is expected to significantly increase the participation of first-generation entrepreneurs, especially in rural and semi-urban areas, where sole proprietorship is a widely preferred business structure. Industry leaders and development economists have welcomed the move, describing it as a critical step in deepening financial inclusion and fueling grassroots entrepreneurship across India.