Govt Boosts Support for Street Vendors with Loan Hike, Credit Card Access

Speedy Summary

• Government Initiative: The Indian government has approved higher subsidized loans for street vendors under Phase 2 of the PM svanidhi scheme, expanding its coverage by including around 50 lakh more beneficiaries.
• Loan Details: Subsidized loan amounts have been revised:

– First-term loan: Increased from Rs 10,000 to Rs 15,000.
– Second-term loan: Increased from Rs 20,000 to Rs 25,000.
– Third-term loan remains unchanged at Rs 50,000.
– beneficiaries are eligible for an interest subsidy of 7%.

• Credit card Proposal: Around 11 lakh beneficiaries who have repaid two tranches of loans will now be eligible for UPI-linked credit cards with a limit of Rs. 30,000. This will provide better access to rolling capital and financial confidence.
• Statistics (Phase-1 Progress):

– Over 68 lakh street vendors availed loans under the first term (Rs.10,000).
– Nearly half (38.4 lakh) have successfully repaid their initial loans.

!Street vendor push: Loan hike, credit cards okayed

indian Opinion Analysis

The government’s decision to expand and enhance the PM SVANidhi scheme underscores its continued focus on supporting street vendors-a notable part of India’s informal workforce. by increasing subsidized loan limits and introducing UPI-linked credit cards with flexible repayment norms through banks, this initiative aims to facilitate financial inclusion and stability among vendors who often face challenges in accessing formal credit systems.

This move could help improve business capacities for street vendors by granting them additional financial tools after proving their repayment credibility under Phase One. Though, careful implementation is critical as expanding subsidies requires sustained monitoring by authorities and effective coordination with banks to avoid fiscal mismanagement or exploitation in disbursement processes.

Given that nearly half the beneficiaries repaid their initial loans successfully under Phase One (a sign of positive borrower discipline), there is potential for greater economic empowerment through such efforts if scaled effectively across urban areas while maintaining transparency.

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