Kochi: Oct 27, 2023

 

 

The micro-credit scheme launched by Government of India for the street vendors- PM SVANidhi or the PM Street Vendor’s Atmanirbhar Nidhi, has helped promote ‘inclusive entrepreneurship’ and proven to be a gender equalizer.  

 

The scheme launched during the Covid 19 pandemic on June 1, 2020, by the Ministry of Housing and Urban Affairs provides collateral free loans up to Rs 50,000 for eligible street vendors in incremental tranches.   It provides loans in three tranches, - 1^st tranche of Rs 10,000, 2^nd tranche of Rs 20,000 subject to repayment of the 1^st of tranche, and 3^rd tranche of Rs 50,000 upon repayment of the second loan.

 

A recent research work by SBI titled PM SVANidhi: Strengthening Country’s Social Fabric through empowering grassroot market mavericks has analysed the transformative impact of PM SVANidhi and has hailed the performance of the scheme stating that 43% beneficiaries are women street vendors.  Moreover 44% of the PM SVANidhi beneficiaries belong to OBC category, while Scheduled Castes and Scheduled Tribes account for 22%. 

 

Sharing the report on his blog, Prime Minister Narendra Modi has hailed the transformative nature of the scheme.  He said that this in-depth research by Soumya Kanti Ghosh of the State Bank of India provided a very clear picture of the transformative impact of PM SVANidhi. It noted the inclusive nature of this scheme and highlighted how it has led to financial empowerment of the marginalized.

 

Under the scheme, regular repayments are incentivized with a 7 per cent interest subsidy, and digital transactions are rewarded with cashback up to ₹1,200 per year.

 

As per the dashboard of the PM-SVANidhi scheme, as on October 26^, 2023, 57.20 lakh loans have been sanctioned as 1^st tranche, 15.92 lakh as 2^nd tranche and 1.94 lakh as 3^rd tranche. 

 

As per the report, the ratio of people repaying first loan of Rs 10,000 and taking the second loan of Rs 20,000 loan is 68%.  Similarly, the ratio of people repaying second loan of Rs 20,000 and taking the third loan of Rs 50,000 loan is 75%, suggesting the financial discipline among the small and marginal street vendors.  Till date the Banks have disbursed Rs 9,152 crore loans under the scheme.

 

Public Sector Banks (PSBs) have taken the lead in sanctioning loans.  Among the PSBs, the State Bank of India (SBI) has disbursed 31% of the total loans under this scheme, followed by Bank of Baroda (31%), Union Bank of India (10%), and Punjab National Bank (8%) respectively.

 

As per PM SVANidhi dashboard, around 5.9 lakh borrowers are in 6 mega cities and 7.8 lakh borrowers come from top 10 million+ population cities.  Among the cities, Ahmedabad has the highest number of PM SVANidhi account holders at 1,37,516. In terms of percentage of active spenders, Varanasi is the top performer where 45% of total spenders are active.

 

According to the report: Till date around 70 lakh loans disbursed in all three tranches, benefiting over 53 lakh street vendors, with a total value exceeding Rs 9,100 crore. The average debit card spending of PM SVANidhi account holders increased by 50% to Rs 80,000 in FY23 as compared to FY21.” In just 2 years average spending per annum increased by Rs 28,000, with a rather small amount of seed capital infused to informal urban entrepreneurs. Two-third of the borrowers are in the range of 26-45 years.

(Release ID: 1971925)