PM credit plan boosts street vendors' debit spend by 50 per cent in 2 years: SBI

Aditi Tandon

New Delhi, October 24

A new research by the State Bank of India has found that the Prime Minister micro credit plan for urban street vendors has raised the debit card spend of beneficiaries by 50 per cent in two years boosting their average consumption.

The analysis of the PM SVANidhi scheme led by Soumya Kanti Ghosh, Group Chief Economic Advisor, SBI, found that 75 per cent loan beneficiaries were from non-general category.

“OBCs account for 44% of total disbursement, while SCs/STs account for 22% and 43% of the beneficiaries are women,” the report adds stressing the scheme’s potential to bridge gender gap.

Analysts also found a growing acceptance of the scheme with a large proportion of beneficiaries repaying loans to claim fresh benefits.

“The ratio of people repaying the first loan of Rs 10,000 and taking the second loan of Rs 20,000 loan is 68%. The ratio of people repaying the second loan of Rs 20000 and taking the third loan of Rs 50,000 loan is 75%,” says the research.

PM SVANidhi Scheme was launched in 2020, as a micro credit scheme, for urban street vendors, and provides collateral-free loans up to Rs 50,000.

So far, 70 lakh loans have been disbursed in three tranches benefiting over 53 lakh street vendors, with a value exceeding Rs 9,100 crore.

A major takeaway of the research is the 50 per cent rise in average consumption of PM SVANidhi account holders.

“The average debit card spending of PM SVANidhi account holders increased by 50% to Rs 80,000 in FY23 as compared to FY21. In just two years, average spending per annum increased by Rs 28,000, with a rather small amount of seed capital infused to informal urban entrepreneurs,” researchers found.