Credit and financing for MSMEs: Upon timely repayment of the first loan up to Rs 10,000, the program provides for granting credit up to Rs 20,000 in the second installment and up to Rs 50,000 in the third installment.
Credit and financing for MSMEs: Loans disbursed under the Prime Minister’s SVANidhi microcredit scheme for nano-entrepreneurs such as street vendors have crossed the 30 lakh mark, according to government data. Launched in June 2020 to offer unsecured working capital loans of up to Rs 10,000 for a duration of one year, the scheme had received over 45 lakh applications as of March 20, 2022, of which 33.38 lakh involved Rs 3 492 crore were sanctioned and 30.28 lakh of the claims amounting to Rs 3,137 crore were disbursed, according to the latest data from the scheme portal. The credit was disbursed through 1.54 lakh branches of various regular commercial banks, regional rural banks, small financial banks, cooperative banks, non-bank financial companies, micro-finance institutions and Self-Help Group (SHG) banks.
The PM SVANidhi scheme aims to benefit over 50,000 lakh street vendors who traded on or before March 24, 2020 in urban areas. Upon timely repayment of the first loan up to Rs 10,000, the program provides for the granting of 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 of the interest subsidy is credited quarterly to the borrower’s account, in accordance with the guidelines of the scheme. The total interest subsidy paid to borrowers so far 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 National Bank of Punjab. 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.
It is important to note that it took almost two years for the government to reach the disbursement target of 30 lakh that was previously set for the first 12 months of the program. “30 lakh was a very ambitious goal. However, we should have reached or approached this target in April and May, but due to the second wave of Covid, not even a single loan was disbursed. While the program was launched on June 1, processing of applications began on July 2. So, three months have been in vain,” the joint secretary of the Ministry of Housing and Urban Affairs, Sanjay Kumar, told Financial Express Online in June last year.
The government has included street vendors in the category of MSMEs from August 2, 2021, through registration on the Udyam portal. However, benefits for street vendors were limited to lending to priority sectors.