Indian street vendor interacting with a customer at a market stall.
The Indian government is urging public sector banks (PSUs) to create specialized loan products of up to ₹1 lakh each for street vendors. This initiative aims to provide a crucial entry point into the formal credit system for this segment, enabling them to build credit histories and eventually qualify for larger loans such as those under the Pradhan Mantri Mudra Yojana (PMMY).
This push is part of a broader strategy to formalize and support micro-enterprises, allowing street vendors to scale their businesses more effectively. By offering accessible credit lines, the government intends to bridge the existing gap in micro-credit availability, which has often hindered the growth of small-scale vendors.
Furthermore, the government is promoting the integration of the Grameen Credit Score, a system designed to assess the creditworthiness of individuals in rural and semi-urban areas, including street vendors. This integration is expected to significantly improve access to formal credit for first-time borrowers who may lack traditional credit records.
About the Author
