Unlocking empowerment: SBI analyses PM SVANidhi scheme's impact on street vendors

About 65% of PM SVANidhi borrowers are between the ages of 26 and 45.

In a recent SBI research paper titled "PM SVANidhi: Strengthening the Country's Social Fabric by Empowering Grassroot Market Mavericks," the transformative impact of PM SVANidhi on street vendors was examined. The PM SVANidhi Scheme, introduced by the Modi government in 2020, is a microcredit scheme for urban street vendors that offers collateral-free loans of up to Rs 50,000.

According to the report by SBI, PM SVANidhi has smoothly integrated marginalized urban micro-entrepreneurs while also breaking down communal barriers. According to the research, "Almost 75% of loan beneficiaries come from the non-general category, a testament to the innate power of well-intended policy schemes to seed transformative changes." OBCs account for 44% of total disbursements, while SCs/STs account for 22%. 43% of the total beneficiaries are women. The report says, “The female share indicates the empowerment of the entrepreneurial capabilities of urban females, giving SVANidhi a gender equalizer tag.”

The report also mentioned that the ratio of people repaying the first loan of Rs 10,000 and taking the second loan of Rs 20,000 is 68 percent, while the ratio of people repaying the second loan of Rs 20,000 and taking the third loan of Rs 50,000 is 75 percent.

When it comes to transaction patterns, the average debit card spending of PM SVANidhi account holders increased by 50% to Rs 80,000 in FY23 compared to FY21. In fact, PM SVANidhi has also made digital transactions more acceptable. When PM SVANidhi loans are issued to Jan Dhan beneficiaries, at least 9.5% of those who were doing less than 10 transactions shift to more digital transactions.

About 65% of PM SVANidhi borrowers are between the ages of 26 and 45. On average, 63% of individuals under the age of 25 and 63% of those over the age of 60 spend more after loan issuance.

To date, around 70 lakh loans have been disbursed in all three tranches, benefiting over 53 lakh street vendors, with a total value exceeding Rs 9,100 crore.