PM SVANidhi Empowers Over 53 Lakh Street Vendors

A recent analysis conducted by the State Bank of India's economic research department (ERD) showed that 43 per cent of the PM SVANidhi scheme beneficiaries are women, indicating its positive influence on empowering entrepreneurial capabilities among urban women. Also, the study underscores that approximately 75 per cent of the loan recipients fall outside the general category, showcasing the scheme's ability to bring about transformative changes.

The Prime Minister Street Vendor's AtmaNirbhar Nidhi scheme has been successful in reaching various sections of the population. OBCs (Other Backward Classes) account for 44 per cent of the total disbursements, while SCs/STs (Scheduled Castes/Scheduled Tribes) account for 22 per cent. Launched by the government in 2020, PM SVANidhi is a micro-credit initiative aimed at supporting urban street vendors by providing collateral-free loans of up to INR 50,000.

As of now, the scheme has disbursed nearly 70 lakh loans in three tranches, with different loan amounts (1st: up to INR 10,000; 2nd: up to INR 20,000; and 3rd: up to INR 50,000), benefiting over 53 lakh street vendors and exceeding a total value of INR 9,100 crore.

Need For The Scheme

Pertaining to the loan repayment behavior, the data reveals that 68 per cent of individuals who received the first loan of INR 10,000 went on to repay it and then availed the second loan of INR 20,000. Moreover, 75 per cent of those who received the second loan of INR 20,000 proceeded to repay it and take advantage of the third loan of INR 50,000. This indicates a growing popularity and the need for the scheme, with the incentives for timely repayments acting as a significant motivator.

The scheme offers attractive incentives for regular repayments, including a 7 per cent interest subsidy, and rewards digital transactions with cashback of up to INR 1,200 per year.

Another outcome highlighted in the report is the increase in debit card spending by PM SVANidhi account holders. Their average annual spending has risen by 50 per cent, reaching about INR 80,000 in FY23 compared to FY21. This indicates that the scheme has effectively injected seed capital into informal urban entrepreneurs, fostering economic growth.

State-Wise Active Spenders

According to the study, at the national level, 22 per cent of total PM SVANidhi borrowers are active spenders, However, the statewise picture is diverse. While in some of the states the active spenders are more than the national average like Punjab (32%), TN and AP (28%) etc., in some of the states the active spenders are less than the national average like WB (17%), Jharkhand (18%), etc.

As per the PM SVANidhi dashboard, around 5.9 lakh borrowers are in 6 mega cities and 7.8 lakh borrowers come from top 10 cities having population of over a million. Of these mega and over million population cities, Varanasi is the top performer where 45 per cent of total spenders are active spenders, followed by Bengaluru, Chennai, and Prayagraj.

Bank-Wise Distribution

It is noteworthy that public sector banks have played a pivotal role in achieving this significant milestone through their support of the first-ever micro-credit scheme designed for urban poor socio-economic section. The top five banks accounted for two-third of total disbursement were State Bank of India (SBI), Bank of Baroda (BoB), Union Bank of India (UBI), Punjab National Bank (PNB), and Canara Bank. Around 31 per cent of total loans were disbursed by SBI alone.

In conclusion, while access to credit plays a pivotal role in improving the operational cycles of micro entrepreneurs, enhancing their capabilities through digital skills and market knowledge, facilitated by urban local bodies, can amplify the intended benefits for these grassroots entrepreneurs.