PM SVANidhi Scheme: Private Sector Banks Issue 1.6% Loans

The Ministry of Housing and Urban Affairs recently announced that as of 29 March 2021, more than 20 lakh street vendors have been provided loans under the PM SVANidhi Scheme. Out of this, 18 lakh loans were provided by public sector banks. On the other hand, private sector banks have provided only 32,534 loans. Private sector banks have provided only 1.6% of loans under Pradhan Mantri Swanidhi Yojana.

Top Performer in Pradhan Mantri Swanidhi Scheme

• Among public sector banks, State Bank of India topped the list and provided 8 lakh loans under the scheme. SBI was followed by Union Bank of India and Bank of Baroda.
  
  
• Among the private banks, Jammu and Kashmir Limited had the largest contribution. This bank disbursed 9,595 loans under the scheme.
  
  
• Among the states and union territories, Uttar Pradesh has disbursed maximum number of loans under the scheme. UP was followed by Madhya Pradesh, Telangana.
  
  
• Of the total beneficiaries, fruit and vegetable vendors accounted for 45%. The share of hawkers selling fast food is 21%. The hawkers who sell textiles and handloom items account for 13%.

Why are private sector banks reluctant?

Private sector banks are reluctant to give loans under the PM Swanidhi scheme for the following reasons:

• Private sector banks are afraid that free credit can turn into a Non-Performing Asset - NPA.
  
  
• Private sector banks are not the first choice of street vendors when it comes to opening an account. Without the bank the lending process gets affected automatically.

PM SVANidhi Scheme

• PM Swanidhi means the Prime Minister Street Vendors Self-Reliant Fund. The scheme was launched in June 2020. The scheme aims to provide credit facilities to street vendors affected by COVID-19. The scheme is implemented by the Ministry of Housing and Urban Affairs.
  
  
• Under this scheme, vendors are provided with an initial capital of Rs 10,000. The seller availing the loan facility will get an interest subsidy of 7%.
  
  
• The prime objective of the PM Swanidhi scheme was to help street vendors resume their livelihood activities which were largely affected by the lockdown (due to COVID-19).

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