Credit and Finance for MSMEs: The scheme looks to offer working capital credit of up to Rs 10,000 through partner banks, NBFCs, and micro-finance institutions for 1-year tenure to around 50 lakh nano entrepreneurs.
Credit and Finance for MSMEs: Prime Minister Narendra Modi’s micro-credit scheme – PM SVANidhi – to make nano entrepreneurs such as street vendors ‘atmanirbhar’ and recover from the lockdown impact has disbursed 91,969 loans so far, according to the available data. The scheme has received over 10.37 lakh loan applications out of which 3,53,084 were sanctioned – 243 per cent up from 1,02,832 applications as on August 12. Moreover, Rs 51.37 crore has been disbursed out of the sanctioned amount of Rs 264.94 crore, as per the real-time data on the PM SVANidhi portal. The scheme was started in June this year to offer credit to hawkers selling fruits, vegetables, tea, footwear, local snacks, books, artisan products apart from cobblers, cigarette shop owners, tailors and more. The lending process was started on July 2, 2020.
“For the first time, a network of millions of street vendors has been truly connected to the system, they have got an identity,” PM Modi said in an interaction with street vendors from Madhya Pradesh on Wednesday. The Prime Minister added that the scheme helps vendors get rid of interest. “Under this scheme, interest rebate of up to 7 per cent is being given anyway. A new beginning has been made in collaboration with banks and digital payment facilitators to ensure that our street vendors do not lag behind in digital shop-keeping,” he added.
The scheme looks to offer working capital credit of up to Rs 10,000 through partner banks, NBFCs, and micro-finance institutions for 1-year tenure to around 50 lakh nano entrepreneurs. Timely payments by street vendors would be incentivized with an interest subsidy of 7 per cent. This would be credited into their accounts quarterly. Such entrepreneurs would also become entitled to cashback up to Rs 1,200 per annum, according to the scheme guidelines.
“Indian street vendors are an integral part of the Indian economy. In fact, they are the defining feature of the urban landscape of India. Even though they have great entrepreneurial acumen, they often face challenges such as high-interest burden on loans taken through informal sources such as money lenders,” Amitabh Kant, CEO, NITI Aayog said in a tweet on Wednesday.
However, street vendors have requested the government to increase the credit limit by more than 2X. “The amount is not sufficient. It should have been around Rs 25,000 per annum. Lending to street vendors has been a big challenge despite so many years after independence…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. The association had written to the government last month seeking credit limit hike.