The micro credit scheme for street vendors under the stimulus package has till now reached only 7 per cent of the target beneficiaries.
As on September 10, loans have been approved for 3.68 lakh street vendors. Of this, loans have been disbursed to 99,000 beneficiaries, as per the data provided by the Ministry of Finance in the Parliament.
The government had announced the PM Street Vendor’s Atma Nirbhar Nidhi scheme as part of the stimulus package and had launched it on July 1. The scheme intends to support 50 lakh street vendors, whose business have been affected by the pandemic, with working capital loans.
The Rs 5000 crore scheme would provide a loan of Rs 10,000 to street vendors and this loan is repayable in 12 monthly installments. “After the government subsidy of 7 per cent, the effective rate of interest charged by micro finance institutions comes to 12 to 13 per cent. Further, the customer gets a cash-back of Rs 100 for digital repayment of the installments. At 12 per cent interest rate, a cash-back of Rs 100 every month for 12 months makes the scheme almost free of cost,’ said Manoj Nambiar, chairperson of MFIN.
However, till now only 3.68 lakh vendors or 7.3 per cent of 50 lakh target beneficiaries have received loan approvals, whereas those who have received the loan amount is less than 2 per cent at 99,000.
“Only those vendors who are registered with urban local administration are eligible for the scheme. Most of the vendors are not registered with the civic bodies and hence stay out of the purview of the scheme. Though registration is an ongoing process, many vendors have apprehensions about it,” said Nambiar.
Further, the banks and micro finance institutions prefer street vendors who are largely stationary at a certain place. Moving from one place to another is considered as a risk factor. “Completely nomadic vendors pose a risk of delinquency as they may become untraceable later,” he said.
However, he hopes that the numbers will pick up going ahead.