Credit and Finance for MSMEs: PM SVANidhi – the 10-month old micro-credit scheme by the Modi government – for micro or nano entrepreneurs such as street vendors has disbursed 84 per cent of loan applications sanctioned so far. 20,25,473 loan applications involving Rs 2,004.86 crore have been disbursed as of April 18, 2021, out of 24 lakh sanctioned applications involving Rs 2,393.87 crore, according to the readily available government information. Launched on June 1, 2020, by the Ministry of Housing & Urban Affairs, the scheme has received more than 41.5 lakh applications so far. PM SVANidhi provides collateral-free of charge working capital credit up to Rs 10,000 by way of banks for a tenure of one year to street vendors in India like hawkers promoting fruits, vegetables, tea, footwear, regional snacks, books, artisan solutions apart from cobblers, cigarette shop owners, tailors, and more by way of the lending method that started July 2, 2020. The scheme had targeted to assistance about 50 lakh lockdown-hit street vendors.
The greatest beneficiaries of the scheme so far have been fruits and vegetable vendors with 45 per cent share in the all round loans disbursed followed by 21 per cent disbursed to rapidly meals and meals things vendors, 13 per cent to vendors of cloth and handloom things, 5 per cent to vendors in beauty and style accessories, and so on. Among major lenders, State Bank of India has led the tally with more than 6 lakh loans disbursed. Union Bank of India, Bank of Baroda, Bank of India, and Canara Bank have been other prime lenders with 2.36 lakh, 2.03 lakh, 1.61 lakh, and 1.51 lakh loans disbursed respectively.
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Vendors are also eligible for a 7 per cent interest subsidy for timely or early repayment. Moreover, there is also a provision of earning Rs 1,200 per annum in cashback in the scheme. However, street vendors had last year urged the government for rising the credit limit by more than 2X. “The amount is not sufficient. It should have been around Rs 25,000 per annum…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 told TheSpuzz Online.
Apart from scheduled industrial banks, the scheme had partnered with non-banking monetary providers and micro-finance institutions for lending to eligible entrepreneurs even as lenders have been supplied with “A graded guarantee cover” on a portfolio basis by way of the Credit Guarantee Fund Trust for Micro and Small Enterprises. SIDBI is the implementation companion of the scheme that will be implemented up to March 2022. The Housing & Urban Affairs Ministry had partnered with foodtech organization Swiggy in December last year and Zomato in February this year to allow street meals vendors to access the on the web consumer base.