Loan disbursals to street vendors hits 3-year low, Gujarat 5th among big states

Gujarat is currently placed fifth among big states – behind Uttar Pradesh, Madhya Pradesh, Telengana and Maharashtra – as far as disbursement of loans to street vendors are concerned (see table).

Uttar Pradesh with Rs 1,775 crore has seen the highest loan disbursals under the scheme, followed by Madhya Pradesh (Rs 1,030 crore), Telangana (Rs 728 crore) and Maharashtra (Rs 679 crore). Gujarat has disbursed Rs 533-crore loan to 4.07 lakh applicants.

To handhold street vendors impacted by the Covid-19 lockdown, the Union Ministry of Housing and Urban Affairs had launched the micro-credit scheme where collateral free loans of Rs 10,000 is given. After successful repayment of the first loan, applicants can apply for bigger loans of Rs 20,000 and thereafter for Rs 50,000.

Addressing mediapersons on the sidelines of the zonal convention of PM SVANidhi hosted by the state government at Gandhinagar, Karad said on Saturday, “We have come to review the SVANidhi scheme. This review is for Gujarat, Maharashtra, Goa and the Union Territory of Dadra and Nagar Haveli and Daman and Diu. The heads of municipal corporations and representatives from banks are also participating…”

“In all, loans worth Rs 533 crore have been given to street vendors in Gujarat, where banks have sanctioned 4.18 lakh applications,” he added. However, loans have been disbursed to only 3.98 lakh applicants in Gujarat, of which just 36 per cent – or 1.45 lakh loans – have been repaid.

Asked why around 1.1 lakh applications have been rejected by banks in Gujarat, IAS officer Prashant Kumar Goyal told mediapersons: “If a street vendor has not paid his existing loan and re-applies for a fresh loan then the bank rejects it. This is a major reason. Other reasons for rejection include change in profession or location or migration or death.”

Karad said the scheme has benefitted 39 lakh people with Rs 6,631 crore loaned by banks across the country. Only Rs 19 lakh of the loans have been repaid so far, he added. On March 18, 2021, then Gujarat chief minister Vijay Rupani had blamed bankers in the state for failing to disburse loans under the scheme, which had then pushed Gujarat to the seventh position among states.