Credit and Finance for MSMEs: Modi government’s micro-credit scheme – PM SVANidhi – for nano entrepreneurs such as street vendors has disbursed 1,36,850 loan applications involving Rs 136.36 crore till date, as per the available data from the scheme. PM SVANidhi has already received more than 14.22 lakh loan applications out of which 5,21,304 were sanctioned – 406 per cent up from 1,02,832 sanctioned applications as on August 12. Also, the sanctioned amount as on September 21 stood at Rs 518.66 crore, as per the real-time data available on the PM SVANidhi portal. The scheme was started in June 2020 to offer collateral-free working capital loans up to Rs 10,000 of one year to around 50 lakh street vendors in India.
The majority of the applications so far have been received by the public sector banks. Out of the total sanctioned applications, over 4.85 lakh applications were sanctioned by public lenders. SBI followed by Union Bank of India, Bank of Baroda, Bank of India and Punjab National Bank were the top lending institutions. Among the top beneficiary states were Uttar Pradesh wherein 90,496 applications were sanctioned. Madhya Pradesh with 164,969 sanctioned loans, Telangana with 94,429 sanctioned applications, Gujarat with 51,315 sanctioned applications and Maharashtra with 18,601 sanctioned applications were the other top states.
The scheme, which started processing loans on July 2, 2020, provides interest subsidy at 7 per cent per annum as incentives to businesses for making regular repayment of the loan. Moreover, there is also a provision of up to Rs 100 per month in cash backs on undertaking prescribed digital transactions. The vendors would also be eligible for the enhanced limit in their next cycle of loan provided there is timely or early repayment of the existing loan. “For the purpose of scheme administration, an end-to-end solution through an IT platform has been developed in collaboration with SIDBI. The approved outlay for PM SVANidhi scheme is Rs 600 crores,” MoS Housing and Urban Affairs Hardeep Singh Puri said in a written reply in the Rajya Sabha on Monday.
Also read: FSSAI ban on junk food sale around schools: 2 cr shops to lose over 75% business, traders tell govt
“For the first time, a network of millions of street vendors has been truly connected to the system, they have got an identity,” PM Modi had earlier this month in interaction with street vendors from Madhya Pradesh. However, street vendors have urged the government to enhance the credit limit by more than 2X. “The amount is not sufficient. It should have been around Rs 25,000 per annum. Lending to street vendors has been a big challenge despite so many years after independence…While there are around 1 crore street vendors in India but even 50 lakh target is good enough as it has definitely given a boost to organizing street vending in India,” Arbind Singh, National Coordinator, National Association of Street Vendors of India had recently told Financial Express Online.