A total of 2.6 lakh applications have been received so far under the Centre's PM SVANidhi scheme, of which 64,000 have been sanctioned and money disbursed in over 5,500 cases, Prime Minister Narendra Modi was apprised in a review meeting on Saturday.

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The Centre had launched the PM SVANidhi scheme to facilitate collateral-free working capital loans of up to Rs 10,000 for one-year tenure to approximately 50 lakh street vendors to resume their businesses affected by the COVID-19 pandemic.

The scheme is run under the Ministry of Housing and Urban Affairs.

While reviewing the implementation of PM SVANidhi, the Prime Minister expressed satisfaction on the use of end-to-end IT solutions through a web portal and mobile app for the administration of the scheme to ensure transparency, accountability, and speed.

Noting that the Ministry is working on a complete IT solution, including the mobile application, for seamless implementation of the scheme, Modi said that the scheme should incentivise use of end-to-end digital transactions by the street vendors.

This should cover the entire gamut of their businesses -- from procurement of raw material to collection of sale proceeds, Modi said.

"Appropriate incentives and training should be conducted for this purpose. Use of digital payments will also help build a credit profile for the street vendors, helping them in future financial needs."

The Prime Minister said that the scheme should not be seen just from the perspective of extending loans to street vendors but also as a part of an outreach initiative for the street vendors' holistic development and economic upliftment.

One step in this direction would be by capturing their entire socio-economic details to facilitate necessary policy interventions, he said.

The Prime Minister said that such data could also be used by different Ministries to benefit them under various schemes for which they are eligible, on priority. These schemes include housing under PMAY-U, cooking gas under Ujjawala Yojana, electricity under Saubhagya, health under Ayushman Bharat, skilling under DAY-NULM, and bank account under Jan Dhan etc.

Under PM-SVANidhi, incentives in the form of interest subsidy (7 per cent per annum) and cash back (up to Rs 1,200 per annum) are provided to promote good repayment behaviour and digital transactions respectively.

The interest subsidy effectively works out to 30 per cent of the entire interest burden for a loan of Rs 10,000 at 24 per cent annual interest rate.

Therefore, as per the government, in effect the vendor does not pay any interest, rather gets a subsidy on the loan amount if he repays in time and uses digital transactions for all receipts and payments.

The scheme allows for increased loan in the next tranche on early or timely repayment.

Loan processing under the scheme begun on July 2 through an IT platform 'PM SVANidhi' with Small Industries Development Bank of India (SIDBI), which is the implementing agency for the scheme.