PM SVANidhi credit scheme crosses 50 pc mark of sanctioned loan applications

PM SVANidhi was launched in December 2020  to benefit street vendors who were impacted due to the Covid pandemic and have been vending on or before March 24, 2020. The working capital credit accessed by these nano entrepreneurs is repayable in 12 monthly instalments.

In this, borrowers are eligible for a 7 per cent interest subsidy as well for timely or early repayment while there is also a provision of earning Rs 1,200 per annum in cash back. The total cash back paid to street vendors as of January 28, 2021 was over Rs 5.76 lakh up from Rs 56,050 as of November 17, 2020.

The Union government has enabled sanctioning of over 54.8 per cent of applications received under its micro-credit scheme PM SVANidhi for nano or micro-entrepreneurs to scale their businesses and enhance their earnings.

Applications received as of January 28, 2021 stood at over 33.22 lakh out of which more than 18.21 lakh applications involving Rs 1,817 crore were sanctioned, according to a data of the Ministry of Housing and Urban Affairs. Out of the sanctioned applications, nearly 13.63 lakh applications involving close to Rs 1,344 crore have been disbursed.

In December 2020, about the total number of applications crossing the 30.60-lakh mark out of which over 16.52 lakh were sanctioned. The lending process for the scheme began July 2, 2020 to offer collateral-free working capital credit up to Rs 10,000 of one year to around 50 lakh street vendors in India including vendors and hawkers selling fruits, vegetables, tea, footwear, local snacks, books, artisan products apart from cobblers, cigarette shop owners, tailors, etc.

The average number of days taken to sanction a loan application is 27. Public sector banks have disbursed the majority of the applications among other lenders including private banks, regional rural banks, microfinance institutions (MFIs), state and urban co-operative banks, small finance and district co-operative banks and more.

SBI was the leading lender under the scheme disbursing 3.84 lakh applications followed by 1.77 lakh applications disbursed by the Union Bank of India, 1.46 lakh applications by Bank of Baroda, 1.17 lakh applications by Bank of India and more.

Borrowers in the fruit and vegetables segment were the biggest beneficiaries of the scheme with 46 per cent of the applications disbursed to them followed by 22 per cent to vendors of fast food and food items, 13 per cent to cloth and handloom item vendors and 5 per cent to businesses in business and fashion accessories.