PM SVANidhi: Covid 2.0 disrupted ‘ambitious’ 30 lakh annual loan disbursement target, says MoHUA Jt Secy
Credit and financing for MSMEs: The PM SVANidhi micro-credit program for street vendors, which disbursed nearly 21 lakh loan applications in 12 months, could have met the “ambitious” annual target of 30 lakh if Covid had not disrupted disbursements in April and May this year, Ministry of Housing and Urban Affairs Co-Secretary Sanjay Kumar told Financial Express Online during an interaction Thursday. Launched on June 1, 2020, the program offers a working capital loan of up to Rs 10,000 for a period of one year to street vendors affected by Covid, including hawkers selling fruit, vegetables, tea, shoes, local snacks, books, etc. as part of the Atmanirbhar program. As of June 3, 2021, 20,659,204 loans involving Rs 2,045 crore have been disbursed out of 24,25,208 sanctioned applications involving Rs 2,419 crore, according to available data from the Ministry of Housing and Urban Affairs program.
“30 lakh was a very ambitious goal. However, we should have met or approached that target in April and May, but due to the second wave of Covid no loans were disbursed. The situation should also be the same in June. In addition, while the program was launched on June 1, processing of applications began on July 2. So three months have passed in vain, ”Kumar said.
The no-warranty program is available to street vendors engaged in sales in urban areas by March 24, 2020 at the latest and who have a sales certificate or identity card issued by local urban organizations (ULB). However, vendors who were identified in the survey by local agencies to guarantee credit but who did not receive the certificate or card are also eligible. These salespeople receive a letter of recommendation (LoR) from the ULB or the respective city sales committee. Those who make a quick or early repayment are also eligible for another loan cycle.
In addition, vendors benefiting from the program are also eligible for a 7 percent interest subsidy credited to their bank accounts quarterly. In addition, providers who opt for digital transactions to accept payments are incentivized to receive Rs 50-100 in monthly cash back rewards. According to program data, 20,654,204 street vendors had accepted payment digitally and received an interest rate subsidy of Rs 8.72 crore. In terms of cash back, Rs 50.53 lakh was paid to street vendors.
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“I am not happy with the Rs 50 lakh cash back rewards; a lot of work needs to be done on it to improve it. 20 lakh sellers are there and over 5 lakh sellers are digitally active. While 5 lakh is not a bad achievement, we could do better. We must therefore change strategy. It is one of our fastest growing loan programs. We have another strand in the program called SVANidhi Se Samriddhi launched in January this year where we try to put beneficiaries in touch with their families to help government programs like Jan Dhan Yojana, Jeevan Jyoti Bima Yojana, Suraksha Bima Yojana, etc. . Kumar added.
However, the National Association of Street Vendors of India, an organization of street vendors, reported problems in the program’s implementation mechanism for its underperformance. “Although the government’s awareness campaign was good, but it did not think about the disbursement before launching it. The deployment process was very vague. In the beginning, some municipal corporations had physical applications filled out by vendors. Then there were some changes in the portal and therefore providers were not able to submit requests. The government relied heavily on municipal bodies rather than city sales committees to accept requests and share the recommendation letter to banks, ”Arbind Singh, national coordinator of the Association, told Financial Express Online. National Street Vendors of India.
Singh added that according to the Street Vendors Act 2014, the city’s sales committee is the representative body for street vendors and other stakeholders. But, “the government bypassed the city sales committees. City agencies are the most incompetent of all government agencies, and as a result, vendors have found it difficult to obtain credit from banks. 50 lakh are the targeted disbursements announced last year by the government for three years. Among the main banks that paid the maximum amount of applications under the program were SBI (6.15 lakh), Union Bank of India (2.37 lakh), Bank of Baroda (2.03 lakh), the Bank of India (1.63 lakh) and the Punjab National Bank (1.54 lakh). Fruits and vegetables (45 percent), fast food and food products (21 percent), fabrics and looms (13 percent), beauty and fashion accessories (5 percent), etc. ., were the main categories of sellers.