The Centre is planning to extend its flagship credit scheme for street vendors, PM Street Vendors Atmanirbhar Nidhi (PM SVANidhi), and introduce a second version in order to promote credit throughout the festive season as the economy continues to recover.
According to an official, the government is considering increasing the maximum working capital loan limit under the PM SVANidhi scheme from Rs.10000 to Rs.25000.
According to the official, the Centre is also planning to increase the maximum guarantee it offers on loans to 25%. At the moment, the government gives maximum guarantee coverage of 15% of the year's portfolio.
Although this would boost the scheme's budgetary allocation, the impact would be minimal, according to the official.
The PM SVANidhi was introduced in June 2020 as a relief measure to provide credit for working capital to street vendors whose businesses had been damaged by the Covid-19 outbreak. The scheme is a Central Sector Scheme that is wholly sponsored by the Ministry of Housing and Urban Affairs (MoHUA), and vendors who take out loans under the scheme are entitled for a 7% interest subsidy.
All street vendors active in vending on or before March 24, 2020 are eligible for a working capital loan of up to Rs.10000 with a one-year repayment period that must be paid in monthly installments. Vendors are eligible for the next cycle of working capital loan with an increased limit if they return on time or early. Banks sanctioned over 28.66 million first-term loans, which loans to 25.78 million borrowers issued. Approximately 207781 first-term loans have already been paid off. For the second term loan, a total of 32,630 applications were submitted, with 20,011 loans sanctioned and loans given to 13,422 borrowers.
The adjustments have been discussed, and they will assist such borrowers acquire additional credit, as most of these vendors are due for their second term loan. "This would benefit in giving credit to such businesses throughout the festive season," stated the official mentioned above.
The increased amount would make the scheme more appealing to sellers while also bringing them into the legitimate credit channel, he noted.
The Cabinet Secretariat will shortly present the planned enlargement of the scheme to the Cabinet for approval, according to the official.
