PM SVANidhi Scheme: 43% Female Share, 75% Beneficiaries from Non-General Category, Shows SBI Study

A recent study by the SBI of the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme has analysed its transformative impact. For instance, the female share in the scheme at 43 per cent indicates the empowerment of entrepreneurial capabilities of urban women, according to the report by the State Bank of India’s economic research department (ERD).

Launched by the Narendra Modi government in 2020, PM SVANidhi is a micro-credit scheme, for urban street vendors, which provides collateral-free loans up to Rs 50,000.

“Almost 75% loan beneficiaries come from the non-general category, a testament of the innate power of well-intended policy schemes to seed transformative changes.” says the SBI ERD report.

OBCs account for 44% of the total disbursement, while SCs/STs account for 22%, according to the findings.

To date around 70 lakh loans have been disbursed in three tranches (1st: up to Rs 10,000; 2nd: up to Rs 20,000; and 3rd: up to Rs 50,000), benefiting over 53 lakh street vendors, with a total value exceeding Rs 9,100 crore, says the report.

The ratio of people repaying the first loan of Rs 10,000 and taking the second loan of Rs 20,000 loan is 68 per cent. The ratio of people repaying the second loan of Rs 20,000 and taking the third loan of Rs 50,000 is 75 per cent, as per the analysis.

The report says that the persistency ratio (2nd loan/1 st loan repaid) is increasing, indicating the need and popularity of the scheme and also incentivising those who are paying back the loan in terms of further loans is acting as a better conduit.

Under the scheme, regular repayments are incentivised with a 7 per cent interest subsidy, and digital transactions are rewarded with cashback up to Rs 1,200 per year.

The average debit card spending of PM SVANidhi account holders increased by 50 per cent to about Rs 80,000 in FY23 as compared to FY21. It means that in just 2 years, the average spending per annum increased by about Rs 28,000, with a small amount of seed capital infused to informal urban entrepreneurs.

As per the PM SVANidhi dashboard, around 5.9 lakh borrowers are in 6 mega cities and 7.8 lakh borrowers come from the top 10 million+ population cities.

Of all these cities, Varanasi is the top performer where 45 per cent of total spenders are active spenders, followed by Bengaluru, Chennai, Prayagraj, etc.