3 min readNew DelhiFeb 12, 2024 07:26 AM IST
First published on: Feb 12, 2024 at 02:54 AM IST
A study that evaluated the impact of the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi), a small working capital loan scheme for street vendors, has found that the first tranche of `10,000 led to an additional annual income of `23,460 for each beneficiary, The Indian Express has learnt.
The study, commissioned by the Union Ministry of Housing and Urban Affairs, was carried out between January and June last year by the Centre for Analytical Finance of the Indian School of Business (ISB). The report will be used by the Ministry for its own assessment of PM SVANidhi and is not likely to be made public, sources said.
PM SVANidhi was launched in 2020 to help street vendors resume their livelihood impacted by the Covid-19 lockdown, by offering them affordable working capital loans. To begin with, a beneficiary can avail `10,000 and, upon its repayment, `20,000. After repaying the second loan, a beneficiary is entitled to apply for a third loan of `50,000.
Data on the PM-SVANidhi portal, as seen on Saturday, showed that 60.65 lakh first-term loans, 16.95 lakh second-term loans and 2.43 lakh third-term loans have been disbursed so far under the scheme.
The ISB study covered 5,141 vendors across 100 urban local bodies in 22 states, the report said. For 95% of those surveyed, the PM-SVANidhi loan was their first-ever bank loan, while for 72% of them said it was the first business loan, the report said.
According to the study, 94% of those beneficiaries who had availed the first loan of Rs 10,000 said they used it to make “business investments”. It was 98% in case of those who had availed the second loan.
The first loan resulted in an additional income of `1,955 per month, or `23,460 in total during the loan’s one-year duration, the report said, adding this was in line with the estimates of marginal returns of small businesses in many parts of the world, it said.
In the sample, the study found 13.9% of all the loans disbursed had been classified as non-performing assets (NPAs), meaning no payments had been made for three months and more. The NPAs were the highest during Covid-19 pandemic and declined over time, with only 9% of loans disbursed in 2022 turning into NPA.
The study also found that the debt-to-income (DTI) ratio of the beneficiaries (9%) was lower than what was expected of small businesses, reflecting the “high creditworthiness” of the vendors.
The study found that after the launch of PM SVANidhi, there had been no significant improvement in the street vendors getting formal credit from other sources — only 9% of the beneficiaries had loans from other financial institutions.
The scheme was launched in 2020 as a part of the government’s economic package during the Covid-19 pandemic and lockdown. (File Photo) 
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