PM SVANidhi Scheme: 1.6% loans from private sector
The Ministry of Housing and Urban Affairs recently announced that over twenty lakh street vendors have been provided loans under the PM SVANidhi scheme till March 29, 2021. Of this, eighteen lakh loans were provided by the Public Sector Banks. On the other hand, the private sector banks have provided only 32,534 loans. Bottom line, the private sector banks have provided only 1.6% loans under the PM SVANidhi scheme.
Top performers in PM SVANidhi Scheme
- Among the public sector banks, the State Bank of India topped the list and has provided 5.8 lakh loans under the scheme. The SBI was followed by Union Bank of India and Bank of Baroda.
- Among the private banks, Jammu and Kashmir Limited was the largest contributor. It had 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, fruits and vegetable vendors accounted to 45%. The hawkers selling fast food accounted to 21%. The hawkers selling cloth and handloom material accounted to 13%.
Why are the private sector banks reluctant?
The private sector banks are reluctant to provide loans under the PM SVANidhi scheme due to the following reasons
- The private sector banks are scared that the free loan might turn into a non-performing asset.
- When it comes to opening an account, private sector banks are not the first choice of street vendors. Without a bank out, the loan processes automatically get affected.
What is PM SVANidhi scheme?
- The PM SVANidhi scheme is the Prime Minister Street Vendor Atma Nirbhar Nidhi. 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 the scheme, the vendors are provided with an initial capital of Rs 10,000. The vendor availing the loan facility will get an interest subsidy of 7%.
- The vendor does not need to provide collateral security to access the loan.
- The main objective of PM SVANidhi scheme was to help the street vendors resume their livelihood activities that was affected largely due to the lockdown (due to COVID-19).
Category: Government Schemes Current Affairs