Credit and finance for MSMEs: The scheme for street vendors to get working capital loans — Prime Minster Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi), which completed three years on Thursday, is one of the fastest growing micro credit schemes by the government, said Hardeep S. Puri, Minister for Housing and Urban Affairs and Petroleum and Natural Gas. At an event to commemorate the three-year milestone, Puri said the scheme “has led an unparalleled wave of financial inclusion and digital literacy in India’s cities and towns that has provided dignity and stability to street vendors.”
The scheme, under the ministry of housing and urban affairs, launched to protect the livelihood of street vendors and regulate street vending was one of the initiatives by the government launched post Covid to support the recovery of businesses of different scales and sizes.
Under the scheme, street vendors — not registered with the Goods and Services Tax (GST) authorities and Udyam portal – selling goods such as vegetables, fruits, ready-to-eat street food, tea, pan shops, artisan products, etc., or services including barber shops, cobblers, laundry services etc, can get access to working capital credit up to Rs 50,000 in three tranches from banks, NBFCs, and microfinance lenders.
The government had last year extended the scheme from March 2022 to December 2024.
As of June 1, 2023, 65.60 lakh loan applications were received since the launch of the scheme, of which 48.50 lakh applications involving Rs 6,120 crore were sanctioned and 46.53 lakh applications amounting to Rs 5.825 crore were disbursed, according to the data available on the scheme’s website.
Among the top lenders under the scheme were State Bank of India with 14.37 lakh loan applications disbursed followed by Union Bank of India (5.09 lakh), Bank of Baroda (4.80 lakh), Bank of India (3.52 lakh) and Punjab National Bank (3.39 lakh).
The scheme offers up to Rs 50,000 in the third tranche on timely repayment of up to Rs 20,000 loan in the second tranche. Similarly, the eligibility for the second tranche is based on the timely repayment of up to Rs 10,000 in the first tranche. The first tranche is repayable in 12 monthly instalments. For the second tranche, the minimum repayment period is six months and a maximum of 18 months to be eligible for the third tranche.
Also read: PM SVANidhi scheme: Number of street vendors availing loan drops 45% in FY23
For vendors repaying loans on time, there is a 7 per cent interest subsidy available on all loan tranches paid on a quarterly or half-yearly basis for standard accounts (accounts which are not non-performing) on the claim dates. Moreover, the scheme also rewards for doing digital transactions. For instance, for 50 eligible digital transactions, Rs 50 cashback is provided to vendors and for the next 50 eligible transactions, Rs 25 cashback is offered.