PM SVANidhi: Loans disbursed register a growth of 9% in QoQ; sanctioned requests jump 11%
Credit and financing for MSMEs: The number of loans disbursed under the PM SVANidhi microcredit program for street vendors to recover from the impact of Covid grew by 9% during the second quarter (September-November) of the program launched on the 1st June 2020, showed official data by Ministry of Housing and Urban Affairs. In comparison, growth in its first quarter (June-August) was 18.5%. As of November 28, 2021, 26.68 lakh loans involving Rs 2,668.52 crore have been disbursed, compared to 24.48 lakh loans worth Rs 2,426.47 crore as of August 29, 2021 and 20.65 lakh loans involving Rs 2,045 crore as of June 3, 2021.
The program provides working capital loans of up to Rs 10,000 for 12 months to street vendors, including hawkers selling fruits, vegetables, tea, shoes, local snacks, books, etc. In terms of sanctioned loans, 30 lakh requests involving Rs 3,037.83 crore were sanctioned as of November 28, 2021, data from the regime’s portal showed. This was an increase of more than 11% from the 26.98 lakh requests worth Rs 2,696.26 crore sanctioned as of August 29, 2021. The total of requests received so far was from 49.45 lakh.
While the program had previously aimed to disburse 30 lakh loans in its first year, however, due to the lockdown and other restrictions in April and May this year after the second wave of Covid, it had managed to disburse nearly of 21 lakh requests. Sanjay Kumar, co-secretary of the Ministry of Housing and Urban Affairs, told Financial Express Online earlier that “30 lakh was a very ambitious target. However, we should have met or approached this target in April and May, but due to the second wave of Covid no loans were disbursed. In addition, while the device was launched on June 1, processing of requests began on July 2. So three months passed in vain.
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Almost 60 percent of borrowers under the program have been men and 41 percent have been women so far. 45 percent of borrowers were fruit and vegetable vendors followed by 21 percent engaged in fast food and food sales, 14 percent in cloth and hand-woven articles; among other categories of goods. Moreover, in terms of lenders, SBI had disbursed maximum requests – 8.26 lakh so far while 3 lakh has been disbursed by Union Bank of India, 2.58 lakh by Bank of Baroda, 2 lakh by Bank of India, 1.85 lakh by Punjab National Bank, etc. Uttar Pradesh, Madhya Pradesh, Telangana, Maharashtra and Andhra Pradesh were the top five states in terms of disbursements since the program began.
In order to promote digital payments among street vendors, the Reserve Bank of India (RBI) in August extended the scope of the Payment Infrastructure Development Fund (PIDF) program to street vendors covered by the SVANidhi program in levels I and II. centers. PIDF was launched in January this year to encourage the deployment of point-of-sale (PoS) infrastructure in small towns and northeastern states.