The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to extend the validity of Prime Minister SVANidhi’s scheme – under which subsidized, unsecured loans are provided to Covid-affected street vendors in urban areas – until December 2024 from March 2022.
A total credit of Rs 8,100 crore will now be facilitated at 7% interest subsidy over the course of the scheme, compared to that of Rs 5,000 crore estimated earlier.
Rolled out in June 2020 to ease the blow of the pandemic to these nanoentrepreneurs, the program offers each beneficiary a working capital loan of up to Rs 10,000 for a period of one year. Repayment on time guarantees a loan of up to Rs 20,000 in the second installment and up to Rs 50,000 in the third installment.
The extension was necessitated because “the pandemic and the resulting stress on small businesses have not fully receded,” the government said in a statement.
This move will allow many more street vendors to access formal institutional credit channels and provide them with an assured source of loans to support their expansion.
The CCEA decision, according to an official estimate, will benefit around 12 million people in urban India, compared to an earlier projection of five million.
No less than 3.19 million loans have already been sanctioned under the program and 2.96 million worth Rs 2,931 crore have been disbursed. Similarly, 2.3 lakh loans were sanctioned and 1.9 lakh loans amounting to Rs 385 crore were disbursed in the second tranche.
Reimbursement by digital transaction is encouraged by the government through cashback. According to official data, beneficiary street vendors made more than 13.5 crore in digital transactions and received cashback of Rs 10 crore. An amount of Rs 51 crore has already been paid by the government as an interest subsidy.