PM SVANidhi Latest Update: Rs.3000 Crore Loans Disbursed under Microcredit Scheme

Credit and Finance for MSMEs: According to government data, loans issued under the Prime Minister SVANidhi microcredit scheme for nano entrepreneurs such as street sellers have surpassed the 30-lakh mark.

According to the latest data from the scheme's portal, the scheme, which was launched in June 2020 to offer collateral-free working capital loans of up to Rs.10000 for one-year tenure, had received over 45 lakh applications as of March 20, 2022, of which 33.38 lakh involving Rs.3492 crore were sanctioned and 30.28 lakh involving Rs.3137 crore were disbursed. Credit was distributed via 1.54 lakh branches of scheduled commercial banks, regional rural banks, small finance banks, cooperative banks, non-banking financial organizations, micro-finance institutions, and Self-Help Group (SHG) banks.

The PM SVANidhi scheme aims to benefit more than 50 lakh street vendors who have been vending on or before March 24, 2020, in urban areas.  The scheme provides credit up to Rs.20000 in the second tranche and up to Rs.50000 in the third tranche if the first loan of up to Rs.10000 is repaid on time. According to the scheme's guidelines, the interest subsidy amount is credited into the borrower's account quarterly.

So far, borrowers have received a total interest subsidy of Rs.45.21 crore.

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

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 met or come close to meeting that target in April and May, but owing to the second Covid wave, not a single loan was given.

While the scheme was introduced on June 1, application processing began on July 2. So three months went in vain," Sanjay Kumar, Joint Secretary of the Ministry of Housing and Urban Affairs stated last year.

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