Credit and Finance for MSMEs: PM SVANidhi scheme aimed at providing affordable working capital credit of up to Rs 10,000 for 1-year tenure to around 50 lakh street vendors or nano entrepreneurs.
Credit and Finance for MSMEs: Prime Minister Narendra Modi’s micro-credit scheme PM SVANidhi to help individual entrepreneurs or nano entrepreneurs become ‘atmanirbhar’ and recover from the Covid impact has already enabled sanctioning of over 1 lakh (1,02,832) loan applications, according to the data available on the website. Started in June this year, the scheme has so far received 5,14,507 applications for credit from these nano entrepreneurs who are essentially street vendors and hawkers selling fruits, vegetables, tea, footwear, local snacks, books, artisan products apart from cobblers, cigarette shop owners, tailors and more. The scheme started with the lending process on July 2, 2020.
PM SVANidhi aimed at providing affordable working capital credit of up to Rs 10,000 for 1-year tenure to around 50 lakh such entrepreneurs “While the effort is sincere by the government to link street vendors with the banking system but 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. We wrote to the minister as well last week to increase the amount. Moreover, there is confusion on the ground about the eligibility as there have been changes in guidelines in the past few days. 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 told Financial Express Online.
According to the scheme, vendors who had returned to their native places and are likely to return to resume their business will also be eligible to seek credit under this scheme. The borrowers would be incentivized for making timely repayment with an interest subsidy of 7 per cent that would be credited into their accounts quarterly. Moreover, entrepreneurs would also be entitled to cashback up to Rs 1,200 per annum, according to the scheme guidelines.
The scheme has engaged with scheduled commercial banks apart from non-banking financial companies and micro-finance institutions for lending to eligible entrepreneurs. SIDBI is the implementation partner of the scheme, according to a statement by the ministry of housing and urban affairs. For lending under the scheme, the lending partners have been provided with “A graded guarantee cover” on a portfolio basis through the Credit Guarantee Fund Trust for Micro and Small Enterprises. The scheme will be implemented up to March 2022.