Government scheme on lending to small busineds

1. Financial Inclusion of street
vendors – Promotion of Micro
Enterprises
State Bank Of India

2. Financial Inclusion
Stated as “ Financially including persons from all strata into the mainstream
banking system .
Financial inclusion index was launched in 2018 based on four dimensions—branch
penetration, deposit penetration, credit penetration and insurance penetration.
The index will have three measurement dimensions; (i) Access to financial
services (ii) Usage of financial services and (iii) Quality.
The Digital India initiative, payments banks and small finance banks are
playing a pivot role along with banks in bridging the financial gap

3. Finance to Street Vendors
• Mostly rely on personal savings to invest in their personal,
social and professional areas
• Work on turnover basis and often avail recourse to high
interest loans from non-institutional lenders
• High repayment capacity but absence of Collateral and firm
domiciliary status restrict institutional credit

4. Challenges associated with Financial
Inclusion of Street Vendors
 Lack of KYC
documents
 Lack of Financial
literacy
 Lack of financial
accessibility
 Lack of regular
Substantial income
(Uncertainty)
 Low level of
savings
 Unable to provide
security against
Credit

5. Prospective Solutions
For Vendors:
•Development of saving habit
•Financial literacy
•Basic accounting of receivables
and sales
For Government:
•Provide legal status by issuing
license and providing hawking
zones
•Include vendors in City and
Town plans
•Set up Social Security fund for
street vendors
For Banks:
•Designing innovative Digital
lending process
•Creation of focused products
•Emphasis to extend more
finance to these vendors under
MUDRA Scheme

6. •MUDRA: Development of a paperless (end to end digital) loan process for
small value loans upto Rs.50,000 (e-MUDRA)
•DRI Scheme for SC/ST:
• Quantum: Upto Rs.50,000
• Tenure: 2 to 3 years
• 4% simple rate of interest
•Pradahan Mantri Suraksha Bima Yojana (PMSBY):
• Age: 18 to 70 years
• Premium: Rs. 12/year
• Risk Coverage: 2 lacs for accidental death or 1 lacs for partial disability
•Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJY):
• Age: 18 to 50 years
• Premium: Annual premium of Rs.330
• SB account holder
• Life insurance cover of Rs.2 lacs
SBI’s
Initiatives

7. PRADHAN MANTRI MUDRA YOJANA (PMMY)
COLLATERAL FREE LOAN UPTO RS. 10 LACS UNDER PMMY SCHEME
Parameters Features
Nature of Facility Working Capital and Term Loan
Purpose Business purpose, capacity expansion, modernization
Target Group
Business Enterprises in Manufacturing, Trading and Services sector
including allied agricultural activities.
Eligibility Criteria Existing & New units
Quantum of loan (Min/Max)
•Maximum loan amount : Upto Rs 10 lacs Loans upto Rs.50,000 are
categorised as SHISHU
•Loans from Rs.50,001 to Rs.500,000 are categorised as KISHORE
•Loans from Rs.500,001/- to Rs.10,00,000/- are categorised as TARUN

8. Margin (%)
Upto Rs. 50,000/- Nil
Rs. 50,001 to Rs. 10 lacs: 10%
Pricing Competitive Pricing Linked to MCLR
Collateral Security
Nil. To be covered under CGFMU.
However, as Primary Security, Hyp. of P&M for TL and Hyp. of Stocks & Receivables for CC to be
done.
Repayment Period
WC/TL: in 3 - 5 yrs including a moratorium of upto 6 months depending on the activity/ income
generation.
Review of WC/TL to be done annually.
Processing Fee/Upfront Fee
•Nil for Shishu and Kishore to MSE Units
•For Tarun: 0.50%(plus applicable tax) of Loan amount
Other Conditions
•The loans under Mudra Scheme are guaranteed by Credit Guarantee for Micro Units (CGFMU) and
the same is provided through National Credit Guarantee Trustee Company (NCGTC).
•The guarantee cover is available for five years and hence for advances granted under Mudra
Scheme the maximum period is 60 months.
•Leads are now available in Udyami Mitra Portal (www.udyamimitra.in). Site can be accessed by
Branches with Username and Password
•All Branches to issue MUDRA RuPay Card for all the eligible CC accounts.

9. Contribution
Under Mudra Loan, SBI has disbursed 5.28
lakh crore to 11.96 crore beneficiaries
during last 3 years.

10. THANKS