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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 available government data. Launched on June 1, 2020, by the Ministry of Housing & Urban Affairs, the scheme has received over 41.5 lakh applications so far. PM SVANidhi offers collateral-free working capital credit up to Rs 10,000 through banks for a tenure of one year to street vendors in India including hawkers selling fruits, vegetables, tea, footwear, local snacks, books, artisan products apart from cobblers, cigarette shop owners, tailors, and more through the lending process that began July 2, 2020. The scheme had targeted to support around 50 lakh lockdown-hit street vendors.
The biggest beneficiaries of the scheme so far have been fruits and vegetable vendors with 45 per cent share in the overall loans disbursed followed by 21 per cent disbursed to fast food and food items vendors, 13 per cent to vendors of cloth and handloom items, 5 per cent to vendors in beauty and fashion accessories, etc. Among leading lenders, State Bank of India has led the tally with over 6 lakh loans disbursed. Union Bank of India, Bank of Baroda, Bank of India, and Canara Bank were other top lenders with 2.36 lakh, 2.03 lakh, 1.61 lakh, and 1.51 lakh loans disbursed respectively.
Also read: India Quotient-backed digital lending platform LoanTap targets Rs 1,000 crore disbursement in FY22
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 increasing the credit limit by over 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 Financial Express Online.
Apart from scheduled commercial banks, the scheme had partnered with non-banking financial companies and micro-finance institutions for lending to eligible entrepreneurs even as lenders have been provided with “A graded guarantee cover” on a portfolio basis through the Credit Guarantee Fund Trust for Micro and Small Enterprises. SIDBI is the implementation partner of the scheme that will be implemented up to March 2022. The Housing & Urban Affairs Ministry had partnered with foodtech company Swiggy in December last year and Zomato in February this year to enable street food vendors to access the online customer base.
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