Credit and Finance for MSMEs: PM SVANidhi – the micro-credit scheme by the Modi government – for micro or nano entrepreneurs such as street vendors has enabled disbursement of 11,80,589 loan applications involving Rs 1,160 crore as of December 22, 2020, according to the information obtainable on the scheme’s site. This is up 762 per cent or 8.62X of 1,36,850 loan applications involving Rs 136.36 crore disbursed as of September 21, 2020. The scheme has currently received more than 30.68 lakh loan applications out of which more than 16.52 lakh have been sanctioned– 217 per cent up from 5,21,304 applications as of September 21. Moreover, the sanctioned quantity has also grown Also, the sanctioned quantity as of September 21 stood at Rs 1,646.26 crore, up from Rs 518.66 crore through the mentioned period.
Importantly, amongst lender categories such as public and private banks, regional rural banks, microfinance institutions (MFIs), state and urban co-operative banks, compact finance and district co-operative banks, and more, public banks have disbursed the majority of applications. While 10.86 lakh applications have been disbursed by public banks, 57,664 applications have been disbursed by the regional rural banks. MFIs disbursed 17,214 applications and private banks disbursed 13,082 applications so far. Moreover, amongst the leading 10 lending institutions have been SBI with 3,26,823 disbursed applications followed by 1.58 lakh by Union Bank of India, 1.31 lakh by Bank of Baroda, 1.05 lakh by Bank of India, 89,437 by Punjab National Bank, and so on.
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The scheme was launched in June 2020 to provide collateral-totally free working capital credit up to Rs 10,000 of a single year to about 50 lakh street vendors in India such as vendors and hawkers promoting fruits, vegetables, tea, footwear, regional snacks, books, artisan items apart from cobblers, cigarette shop owners, tailors, and more by means of the lending procedure that started July 2, 2020. The typical days taken to sanction a loan application are 26. A important 46 per cent of applicants have been involved in promoting fruits and vegetables followed by 21 per cent in quick meals and meals products, 13 per cent in cloth and handloom products, and more.
PM SVANdhi provides an interest subsidy at 7 per cent per annum as incentives to borrowers for producing typical loan repayment although it also has a provision of up to Rs one hundred per month in money backs on undertaking prescribed digital transactions. The vendors could also be eligible for the enhanced limit in their subsequent cycle of the loan if there timely or early repayment.