Around Rs 4,000 crore has been disbursed under the PM SVANidhi Scheme for street vendors so far, Union Minister of Housing and Urban Affairs Hardeep Singh Puri said on July 7.
As many as 53.7 lakh eligible applications have been received under the PM SVANidhi Scheme, 36.6 lakh loans have been sanctioned and 33.2 lakh loans disbursed. The amount disbursed so far under the scheme is Rs 3,592 crore and about 12 lakh street vendors have repaid their first loan, the minister told reporters after launching the SVANidhi Mahotsav – a cultural festival for celebrating the success of PM SVANidhi Scheme and SVANidhi Mahotsav website.
MoHUA Secretary Manoj Joshi and Additional Secretary Sanjay Kumar were also present on the occasion.
Only 12-13 percent of loans disbursed to street vendors under the scheme have become NPAs, Puri said.
The scheme facilitates collateral-free working capital loans up to Rs 10,000, of one-year tenure, with enhanced loans of Rs 20,000 and Rs 50,000 in the second and third terms respectively, on repayment of earlier loans, to enable business expansion.
MoHUA is organising ‘SVANidhi Mahotsav’ from July 9 to July 31 in 75 cities across 33 States/UTs of the country.
The SVANidhi aims to celebrate 75 years of India’s independence with these nano-entrepreneurs, honouring their journey under the PM SVANidhi scheme for demonstrating credit discipline, digital behaviour and displaying their astute business acumen, the ministry's statement said.
PM SVANidhi scheme was launched on June 1, 2020, to facilitate working capital loans to street vendors to help them restart their businesses which were adversely impacted due to the lockdowns imposed during the COVID-19 pandemic. This scheme is the first comprehensive effort for financial inclusion of street vendors. Prior to this scheme, street vendors were dependent on informal credit channels paying high rates of interest, it said.
It incentivises the adoption of digital transactions by way of cashback of up to Rs 100 per month which in turn would build their credit profile facilitating future loans from the Lending Institutions. It also incentivises the repayment by way of 7 percent interest subsidy, the ministry’s statement said.
The structuring of the product was done in such a way that if a street vendor repays the loan EMIs promptly and conducts the required number of digital transactions, the interest subsidy and the cashback availed would make the loan interest free.
The concept of ‘Letter of Recommendation’ (LoR) was introduced to recognise new street vendors by encouraging demand-based registration. The importance of LoR can be gauged from the fact that more than 30 lakh new vendors have been recognised through this instrument, thereby doubling the number of recognised street vendors to around 60 lakh, the ministry said in a statement.
So far 25 states have either exempted the stamp duty on PM SVANidhi loans or charged a nominal amount of up to Rs 100.
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