In a letter to the public sector banks, the Department of Housing and Urban Affairs noted that the “sanctions and repayments” of street vendors’ loans, as part of a plan launched during the Covid-19 closure last year, had “declined”.
“It has been noted that after the first few months of success, sanctions and withdrawals have been reduced because of a number of factors such as bank mergers, banks became operational due to the quarter ending December, the highest number of applications returned by certain banks and bank branches failed to contact street vendors,” said a letter signed by Secretary Durga. Shanker Mishra Tuesday.
“As you know, SVs (street vendors) in general, are not financially viable and rely on credit from informal sources. In such a case, the rejection of loan applications based on CIBIL’s low prices is not advisable, unless the seller fails to repay the loan, ”he said.
“I would urge you to establish an appropriate application process (and) review credit guidelines for merchants with low CIBIL points under this program,” the note said.
The issue of loan applications was also raised at a webinar with banks on Monday.
In his letter, Mishra said the Department would issue a separate SOP (standard operating procedure) system that would place the responsibility on the activities of local banks and urban organizations. The department has also decided to hold camp camps in the cities for the next three Saturdays, where lending institutions will build desks while local organizations will mobilize street vendors.
The scheme – AtmaNirbhar Nidhi of PM Street Vendor (PM SVANidhi) – provides street vendors with a non-performing interest rate of less than Rs 10,000 per annum. It was thought to help the daily wage workers, most of whom are migrant workers, who suffered during the ban.
According to the latest data that has been collected by the department, there are around 42.7 lakh street vendors in the whole country, excluding West Bengal. Since the program was launched seven months ago, a total of 37 lakh loan applications have been received; 20 lakh punished.
Sources in the department said PSU banks accounted for 95 percent of the loans approved so far. Top officials said the total number of non-performing assets (NPAs) under the scheme was 7 percent so far.
According to the service details, Uttar Pradesh has the highest number of street vendors (7.5 lakh), followed by Maharashtra (5.7 lakh), Telangana (5.7 lakh), Madhya Pradesh (5 lakh), Gujarat (3.6 lakh) and Andhra Pradesh (2.7 lakh).