Money & Banking

Step-up working capital loans to street vendors: RBI nudges PSBs

K Ram Kumar Mumbai | Updated on June 14, 2021

A street food vendor waits for customers on a footpath in New Delhi. (file photo)   -  REUTERS

Loan sanctions only at 58 per cent of total applications

The Reserve Bank of India (RBI) has impressed upon public sector banks (PSBs) the need to step up working capital loans up to ₹10,000 to street vendors, who have taken the brunt of the COVID-19 pandemic and consequent lockdowns.

Given that the livelihood of street vendors (SVs) has been adversely affected in the two waves of the pandemic, the central bank is keen that Banks mount a larger outreach under the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, said a top banker.

As on June 14, 2021, lenders (including Banks, non-banking finance companies, and microfinance institutions) received a total of 42,27,999 applications under the PM SVANidhi scheme, which was launched last year.

However, the ratio of the number of loans sanctioned and disbursed as a percentage of the total applications was only 58 per cent, as per Ministry of Housing and Urban Affairs (MoHUA) data.

The ratio of the number of loans disbursed to loans sanctioned stood at 84.41 per cent. As a result, total loans approved and disbursed by lenders stood at ₹2,457.85 crore and ₹2,059.46 crore, respectively.

According to MoHUA data, the average days to sanction a loan to SVs was 20 days. About 60 per cent of loans disbursed were to male SVs, with the remaining disbursed to female SVs. The average age of the loan applicant was 41 years.

The banker quoted above said the scheme could be tweaked to ensure more coverage of SVs.

The number of SVs accepting digital payments stood at 19,31,272. These vendors received a cashback of ₹50.53 lakh

Street vendors selling vegetables, fruits, ready-to-eat street food, tea, cloth & handloom, beauty & fashion accessories, footwear, artisan products, etc., and barber shops, cobblers, paan shops, laundry services have suffered untold misery in the pandemic.

Covid-19 related lockdowns forced the aforementioned entities to shutter business either temporarily or permanently.

As per the PM SVANidhi scheme, the individual lending institution can form Joint Liability Groups (JLGs) of eligible vendors. The Common Interest Groups (CIGs) of street vendors, already formed by States, can be converted into JLGs by lending institutions.

The scheme has been designed to help formalise the street vendors and open up new opportunities to move up the economic ladder.

Total Applications







₹2,457.85 cr

₹2,059.46 cr

Published on June 14, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor