One intervention the Centre initiated to help workers in the informal sector during the pandemic is the Prime Minister Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi).
It facilitates collateral-free loans of Rs 10,000 for one-year tenure with a subsidy of 7 per cent interest a year and cashback of up to Rs 1,200 on digital transactions. If repaid properly, the beneficiary can borrow Rs 20,000 the next year.
Yet for those like Eshwari S, a fruit seller from Parrys Corner, the loan made little difference. "The loan isn't helping us, and on top of that, they charge a high interest rate," she said.
Saravanan M, manager of State Bank of India, Parrys branch, explained the subsidy kicked in only with timely repayments. "Otherwise, they repay the loan at an interest of 9.9 per cent. The promised digital cashback is only available if the beneficiaries used Google Pay," he added.
For Eshwari these conditions made the loan onerous. "I had to stop paying my daughter's nursing school fees to repay this loan as we didn't have money," she says.
P Siva Shankar, chief manager of Union Bank of India, Anna Nagar branch, said that his brand had disbursed the loans to 10 beneficiaries from 2020 till now, at an interest rate of 8-9.5 per cent. "However, they are yet to receive the subsidy," he added.
The Chennai Corporation, through which the loan is facilitated, conducted camps in its 15 zones encouraging vendors to take the loans. "We had a target of 96,000 and got 1,02,247 vendors' applications as of May. We only help with the application process. The bank decides whether to reject, sanction and collect the amount," an official said.