Credit and Finance for MSMEs: Loans disbursed under the Prime Minister SVANidhi microcredit scheme for nano entrepreneurs such as street vendors has crossed the 30-lakh mark, data showed. Launched in June 2020 to offer collateral-free working capital loans up to Rs 10,000 for one-year tenure, the scheme had received over 45 lakh applications as of March 20, 2022, of which 33.38 lakh involving Rs 3,492 crore were sanctioned and 30.28 lakh applications amounting to Rs 3,137 crore were disbursed, data from the scheme’s portal showed. The credit was disbursed via 1.54 lakh branches of various scheduled commercial banks, regional rural banks, small finance banks, cooperative banks, non-banking financial companies, micro-finance institutions and Self-Help Group (SHG) banks.

PM SVANidhi scheme targets to benefit more than 50 lakh street vendors who have been vending on or before March 24, 2020, in urban areas. On timely repayment of the first loan of up to Rs 10,000, the scheme has a provision of providing credit up to Rs 20,000 in the second tranche and up to Rs 50,000 in the third tranche. The scheme provides an interest subsidy of 7 per cent. The amount under interest subsidy is credited into the borrower’s account quarterly, as per the scheme’s guidelines. The total interest subsidy paid so far to borrowers was Rs 45.21 crore. 

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Among the top lenders were State Bank of India (SBI) with 9,25,105 applications disbursed followed by 3,32,539 applications disbursed by Union Bank of India, 3,08,509 by Bank of Baroda, 2,34,281 by Bank of India, and 2,11,944 by Punjab National Bank. In terms of states, Uttar Pradesh led the disbursement tally with 7,77,290 applications while 5,02,339 applications were disbursed in Madhya Pradesh, 3,75,824 in Telangana, 2,06,308 in Gujarat, 2,04,101 in Maharashtra, and 1,89,263 in Andhra Pradesh. 

Importantly, it took nearly two years for the government to achieve the 30-lakh disbursement target that was earlier set for the first 12 months of the scheme. “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 in June last year. 

The government included street vendors in the MSME category with effect from August 2, 2021, through Udyam portal registration. However, benefits to street vendors were restricted to Priority Sector Lending.