PM SVANidhi scheme: A thousand hurdles for a Rs 10K loan to street vendors

Implementation of the PM SVANidhi scheme, meant to help street vendors, has been erratic with banks

Several months since the government announced the launch of the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, street vendors continue to face various hurdles when it comes to its implementation.

The scheme envisages granting collateral-free loans of up to Rs 10,000 to street vendors across the country, with minimum documentation, in a bid to relieve them and their businesses from lockdown-induced stress.

It’s been a bumpy road. Since the scheme was launched, street vendors, with the help of the National Association of Street Vendors of India (NASVI), have been putting out fires as and when they arise.

“Initially, the problem was with vending certificates, letters of recommendation (LORs), and awareness around the same,” says Gurunath Sawant, NASVI’s co-ordinator in Maharashtra. Even though guidelines state that vendors without vending certificates can still apply for the loan, provided they are granted an LOR from an urban local body or the Town Vending Committee, many have been left out of the process simply because they didn’t know about the provision.

Despite the setting up of registration camps in largely urban areas, many vendors who migrated to their respective villages during the lockdown remain unaware. Sawant says even if they get to know somehow, travelling back to cities to apply for the loan seems unfeasible.

Moreover, vendors allege bank managers are not performing their duties and acting arbitrarily. Sample this: Kuldeep (first name only), a tea-seller from Preet Vihar, claims he went to a State Bank of India branch where he was told that the scheme was only available for residents of Uttar Pradesh and not of Delhi. He is now consulting with NASVI.

For those such as Bhopal Singh, a street vendor from Mandavali, New Delhi, getting the loan was no easy feat. Singh says it took him many months to receive the loan. When he visited a local branch of Punjab National Bank with an LOR, he was met with several excuses from the staff, some including the bank “not having permission” from superiors for sanctioning the amount. It took him over seven to eight visits to receive the loan.

Street vendors often have to shut shop and bear travel expenses to go to banks for money. Multiple visits end up costing them a sizeable portion of the Rs 10,000 loan, notes Irfan Khan, NASVI’s Delhi coordinator. In places like Mumbai, where local trains have not been operating due to the lockdown, travelling is no longer the cheap affair it once was. Many vendors complain of being turned away by banks on the grounds that the bank manager was unavailable.

Documentation has also been an issue. Many vendors say they were asked to submit more proof than necessary. Some were asked to submit affidavits on expensive stamp papers. NASVI coordinators say the government has taken notice of the same and has asked bankers to desist.

The loan disbursement ratio also remains a concern. As of December 21, while the government says it has received over 3.05 million applications, out of which it has disbursed over 1.17 million, the rate of disbursal is not the same everywhere.

For instance, the North Delhi Municipal Corporation has received over 5,400 applications for loan. However, it has only disbursed loans to 534 so far. After receiving more than 5,875 applications, the South Delhi Municipal Corporation has disbursed loans to only 364.

Greater Mumbai has received over 21,100 applications, but the disbursed number is only slightly above 4,000. In Bhagalpur, Bihar, where about 2,770 applications have been received, amount has been disbursed to only 234.

Disparity between states is evident. In places such as Uttar Pradesh, NASVI coordinators say things have been running smoothly. Disbursal ratio is also higher than other states here.

The fortunate vendors who have received the loan, after clearing all of these hurdles, are now dealing with other problems. Arvind Singh, national coordinator of NASVI, says once the vendors use the money to run their businesses, the police, under the garb of Covid-related restrictions, harasses them and asks them to shut shop. “On one hand, the government is trying to encourage these vendors to receive loans to put their businesses back on track. On the other, once the vendors receive loans, the police are not allowing them to function smoothly. This needs to be taken care of,” he says.