The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to extend the validity of the Prime Minister SVANidhi scheme — under which subsidised and collateral-free loans are provided to Covid-hit street vendors in urban areas — up to December 2024 from March 2022.
A total credit of Rs 8,100 crore will now be facilitated at an interest subvention of 7% during the course of the scheme, compared with that of Rs 5,000 crore estimated earlier.
Rolled out in June 2020 to soften the pandemic blow to these nano entrepreneurs, the scheme offers each beneficiary working capital loan up to Rs 10,000 for a tenure of one year. Timely repayment ensures a loan up to Rs 20,000 in the second tranche and up to Rs 50,000 in the third tranche.
The extension has been necessitated as “the pandemic and related stress on the small businesses have not fully retracted”, the government said in a statement.
The move will enable a much larger number of street vendors to have access to formal institutional credit channels and provide them an assured source of loans to support their expansion.
The CCEA move, according to an official estimate, will benefit about 12 million people in urban India, against the earlier projection of five million.
As many as 3.19 million loans have already been sanctioned under the scheme and 2.96 million amounting to Rs 2,931 crore have been disbursed. Similarly, 2.3 lakh loans have been sanctioned and 1.9 lakh loans amounting to Rs 385 crore have been disbursed in the second tranche.
Repayment through digital transaction is encouraged by the government through cashbacks. According to official data, beneficiary street vendors have conducted more than 13.5 crore digital transactions and have been given a cashback of Rs 10 crore. An amount of Rs 51 crore has already been paid by the government so far as interest subsidy.