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PM SVANidhi: Loans to street vendors jump to nearly 90% of applications sanctioned

Credit and Finance for MSMEs: The jump in 2021 also assumed significance as the government had included street vendors under the MSME category.


Credit and Finance for MSMEs: The share of loans disbursed under the Prime Minister SVANidhi micro-credit scheme for nano entrepreneurs such as street vendors has jumped to nearly 90 per cent. Launched in June 2020 to provide 

collateral-free working capital loans up to Rs 10,000 for one-year tenure, the scheme had disbursed 71 per cent of applications sanctioned till December 2020 that jumped to 88 per cent in the past 12 months, official data showed. As of January 5, 2022, out of 43.95 lakh applications so far, 73 per cent applications (32.08 lakh) were sanctioned. Out of the sanctioned applications, 28.20 lakh applications were disbursed, PM SVANidhi data from the Ministry of Housing and Urban Affairs showed. The growth came amid the second wave and following recovery period as vendors returned to streets and overall retail activity picked up until Omicron struck in December.

The jump in 2021 also assumed significance as the government had included street vendors under the MSME category. With effect from August 2 2021, street vendors were added under retail trades as MSMEs and were allowed to register on Udyam Registration Portal even as benefits to them were restricted to Priority Sector Lending only. Street vendors, however, had sought access to other benefits as well offered by the government.

“The credit amount should be around Rs 25,000 while benefits should be extended to street vendors as well to help them recover post current Covid 

situation. Street vendors couldn?t sell on the streets during the pandemic. Work from home scenario also hit them while selling in residential areas wasn?t significant due to restrictions. Many had borrowed money from informal sources including friends and family and others or deployed the savings,” Arbind Singh, National Coordinator, National Association of Street Vendors of India told Financial Express Online.

On the other hand, to enhance digital payments among street vendors, the Reserve Bank of India had extended the Payments Infrastructure Development Fund (PIDF) Scheme in August last year to vendors covered under the PM SVANidhi scheme in Tier-I and Tier-II centres. The fund was originally launched in January 2021 to boost the deployment of Point of Sale (POS) infrastructure in Tier-3 to Tier-6 centres and northeastern states.

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The growing cases of Omicron variant have again put street vendors? survival in jeopardy as state governments have been imposing curbs. In Mumbai, street 

vendors feared the first and second wave-like situation with rising cases. “There are restrictions on selling in the evening. People are getting fined for not wearing masks. Also, there is a daily decline in the number of customers who visited us every day as they have again gone back to online purchases. As a result, daily earnings have also dropped. We are managing somehow by doing home deliveries. Since fruits and vegetables are perishable, there is a risk of stock wastage if restrictions are tightened,” Anand Kumar, a member of Azad Hawkers? Union told Financial Express Online.

The amount involved in sanctioned applications under PM SVANidhi was Rs 3,275 crore and Rs 2,849 crore in applications disbursed. State Bank of India led

the disbursements so far with 8.74 lakh applications followed by 3.12 lakh applications by Union Bank of India, 2.76 lakh applications by Bank of Baroda,

2.21 lakh applications by Bank of India. Madhya Pradesh (4.55 lakh applications), Telangana (3.49 lakh applications), Uttar Pradesh (7.55 lakh applications), Andhra Pradesh (1.85 lakh applications) were the leading states in disbursements. 

However, the government had targetted disbursement of 30 lakh applications in the first year of its operations (June 2020-May 2021). “30 lakh was a very ambitious target. However, we should have achieved that target or reached close to it in April and May but due to the second Covid wave, not even a single loan was disbursed. While the scheme was launched on June 1, the processing of applications had started on July 2. So, three months went in vain,” Ministry of Housing and Urban Affairs Joint Secretary Sanjay Kumar had told Financial Express Online.