Whither success? 16% loans for street vendors 'turn into' non-performing assets

By Venkatesh Nayak* 
On July 7, 2022, the Union Ministry of Housing and Urban Affairs (MoHUA) announced the launch of SVANidhi Mahotsav to celebrate the ‘success’ of the PMSVANidhi scheme being implemented by the Ministry. This festival will be celebrated across 75 Indian cities until the end of this month. The Ministry also presented data about the number of applications received, sanctioned and disbursed including the number of beneficiaries who had repaid the loans they had availed under the scheme. 

He is also reported to have stated that only 12-13% of the loans have become non-performing assets (NPAs), although this data is not recorded in MoHUA’s press release displayed on the website of the Press Information Bureau (PIB). In other words, this is the proportion of loans that might have gone bad as the beneficiaries have not been able to repay the loans.

Incidentally, I had also sought data about the implementation of the PMSVANidhi scheme under the Right to Information Act, 2005 (RTI Act) in May 2022. The data is being analysed and preliminary findings will be released in multiple tranches. I was initially planning to release our preliminary findings about the manner of disbursal of loans across the States and UTs today. However, as events have overtaken my initial plan, I am releasing preliminary findings about PMSVANidhi loans that have become NPAs in MoHUA’s view.

About PMSVANidhi Scheme

The Union Government launched the Prime Minister Street Vendors’ AtmaNirbhar Nidhi (PMSVANidhi) scheme on 01 June, 2020 for the benefit of millions of street vendors whose livelihoods were drastically impacted by the nation-wide COVID-19 pandemic lockdown imposed towards the end of March 2020. PMSVANidhi aims to provide collateral-free loans at subsidised rates of interest to eligible street vendors in three tranches- Rs. 10,000 in the first year and Rs. 20,000 and Rs 50,000 in the second and third years respectively. 

Only those who fully repay the first loan are eligible for the second loan and those who repay both are eligible for the third loan. Advertised as a major lifeline scheme for the most vulnerable and marginalised but nevertheless self-employed members of the citizenry, the implementation of the scheme, originally intended for two years, has been extended to the current financial year with a budgetary allocation of Rs. 150 Crores (Rs. 1,500 Million).

The RTI Intervention

In May 2022, after researching implementation data published by the Union Government both inside and outside Parliament, I submitted an RTI application to the Union Ministry of Housing and Urban Affairs (MoHUA) through the RTI Online Facility seeking the following information:
“I. Apropos the reply to the Unstarred Question No. 4612 tabled in the Lok Sabha on 31 March, 2022 about the implementation of PM-SVANidhi scheme across the country by Hon. Minister of State in your Ministry, I would like to obtain access to the following information under the RTI Act, 2005 in the form specified at paragraph no. II below:
a) The State and Union Territory-wise (UT) no. of men, women and transgender street vendors who have applied for loans under the said scheme in every financial year since its inception, till date,
b) The State and UT-wise no. of men, women and transgender street vendors who were disbursed loans in every financial year since the inception of the said scheme, till date,
c) The State and UT-wise no. of street vendors belonging to SC, ST, OBC, General and PwD (Divyangjan) categories who have applied for loans in every financial year since the inception of the said scheme, till date,
d) The State and UT-wise no. of street vendors belonging to SC, ST, OBC, General and PwD (Divyangjan) categories to whom loans were disbursed in every financial year since the inception of the said scheme, till date,
e) The State and UT-wise no. of street vendors belonging to minorities category who have applied for loans in every financial year since the inception of the said scheme till date. Please provide minority community-wise break up,
f) The State and UT-wise no. of street vendors belonging to minorities category who have been disbursed loans in every financial year since the inception of the said scheme till date. Please provide minority community-wise break up,
g) The State and UT-wise no. of beneficiaries of the said scheme who have repaid in full the loans availed in every financial year since its inception,
h) The State and UT-wise no. of beneficiaries of the said scheme who have defaulted on the repayment of loans they availed in every financial year since its inception,
i) The total amount of interest on loans disbursed under the said scheme earned by each lending agency in every financial year since its inception, and
j) The State and UT-wise amount of interest subsidy deposited in the bank accounts of the beneficiaries of the scheme as per the applicable guidelines.
II. Form of access to information sought: Please upload all the information described above on the website dedicated to the PM-SVANidhi scheme and inform me of the respective URLs by email.
III. Kindly note, all information described above is in the nature of information that is required to be disclosed suo motu by your Ministry as per relevant clauses of Section 4(1)(b) read with Section 4(2) of the RTI Act. As I have not been able to find this information on the website of your Ministry or on the website dedicated to the said scheme, I am constrained to submit this formal request for information.”
Within a month of receiving the RTI application, MoHUA’s Central Public Information Officer (CPIO) collected an additional fee of Rs. 50/- and supplied all the information sought, via email and in hard copy. After converting the data tables supplied by MoHUA’s CPIO into open data (i.e., machine readable and analysable data) I have analysed the figures with regard to PMSVANidhi loans turning into NPAs.
Click here for the CPIO’s reply and extracted data tables.
Click here for the open data sets.

Preliminary analysis of loan disbursal and NPA data

In a recent press note, MoHUA stated that 53.7 lakh (5.37 million) eligible applications were received from street vendors since the inception of the PMSVANidhi scheme. Loans were sanctioned against 36.6 lakh (3.66 million) applications. Loans were actually disbursed to 33.2 lakh (3.32 million) street vendors since the inception of the scheme.
According to the data supplied by MoHUA’s CPIO, a total of 48.70 lakh (4.87 million) applications for loans- both first and second that were received across the country and a total of 32.26 lakh (3.22 million) loans that were actually disbursed (including first and second loans). In other words, 66.25% of the loan applications have been successfully disbursed as on the date of the RTI application. 

The figures cited by MoHUA three days ago will be higher obviously because the implementation statistics would have been updated on a daily basis since the sending of the RTI reply. So the preliminary findings given below are limited to the dataset supplied by the CPIO under the RTI Act.

Coverage of PMSVANidhi Scheme

While a detailed analysis of the geographical and demographic coverage of PMSVANidhi scheme will be given in the next tranche of our findings, the following broad-based findings arise from the analysis of the composite figures relating to the disbursal of 1st and 2nd loans under the scheme:

• Uttar Pradesh (UP) topped the list of States and UTs with the highest number (8.71 lakhs or 871,902) of disbursals (1st and 2nd loans taken together) between financial years (FYs) 2020-21 to 2022-23. Madhya Pradesh (MP) takes 2nd place on the list with 5.20 lakh (520,250) loan disbursals. Telangana with 4.01 lakh (401,304) disbursals, Gujarat with 2.18 lakh (218,367) and Maharashtra with 2.12 lakh (212,113) disbursals take 3rd, 4th and 5th places respectively.
• Sikkim reported only one loan disbursal during the implementation period. Ladakh with 367 disbursals, Andaman and Nicobar Islands with 534, Mizoram with 582 and Meghalaya with 696 disbursals figure at the bottom of the pile.
• UP and MP together accounted for 43.15% of the loans disbursed to street vendors since its inception. The South Indian states of Andhra Pradesh (AP), Telangana, Karnataka, Kerala and Tamil Nadu and the UT of Puducherry accounted for 28.90% of the loan disbursals during the same period. The rest of the loans were disbursed across the remaining States. In other words, these seven States and one UT cornered almost 3/4ths (72.05%) of the benefits of the PMSVANidhi loan scheme.

NPAs reported under PMSVANidhi scheme

• According to data supplied by MoHUA under the RTI Act, 5.12 lakh (512,236) PMSVANidhi loans have become NPAs. This amounts to 15.88% of the loans disbursed until the date of the RTI application.
• UP reported the largest number (1.85 lakhs or 185,918) of NPAs followed by MP (95,807), Telangana (55,763), Maharashtra (36,130) and Karnataka (28,516) in that order.
• Between 10,000-29,000 NPAs were reported from Gujarat (20,084), Tamil Nadu (18,689), AP (13,628) and Chhattisgarh (10,824).
• Sikkim and Ladakh do not figure on the list of States reporting NPAs as supplied by MoHUA’s CPIO. The smallest number of NPAs was reported from Mizoram (4). Andaman & Nicobar Islands (37), Meghalaya (48), Daman and Diu and Dadra Nagar Haveli (99) and Goa (100) also reported lowest NPA figures.
• Between 140-400 NPAs were reported from States and UTs such as Himachal Pradesh (146), Chandigarh (153), Arunachal Pradesh (160), Nagaland (165), West Bengal (308) and Tripura (375).
• The remaining States and UTs reported NPAs ranging between 1,600-10,850.
• Proportionately speaking, Chhattisgarh (21.62%) and UP (21.32%) reported the highest percentage of NPAs. In other words, more than 2 out of every 10 loans turned into NPAs in these States. Manipur reported a 19.17% rate of loans turning into NPAs followed by Puducherry (18.81%), Karnataka (18.51%) and MP (18.42%).
• The lowest NPA rate was reported from Mizoram (0.69%). West Bengal (2.29%), Himachal Pradesh (3.68%), Chandigarh (4.03%) and Assam (4.51%) also reported very low rates of PMSVAnidhi loans turning into NPAs. Other States and UTs reported between 6-17% rates of loans turning into NPAs.
• If year-wise NPA data is taken up, FY 2020-21 reported only 98,958 loans that went bad. However, in FY 2021-22 this figure increased more than four-fold to 4.13 lakh (413,278) NPAs.

As NPA data about 1st and 2nd loans was not sought separately, it is not possible to analyse which of these loans turned into NPAs. I hope readers will seek this information from MoHUA through the RTI Act.
In our next despatch, we will present preliminary findings from our analysis of the geographical and demographic coverage of PMSVANidhi loans.
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*Commonwealth Human Rights Initiative, New Delhi. All facts are in the public domain. Views are personal