November 17, 2016

Financial inclusion offers ray of hope for street vendors

This post originally appeared on The Hindu.

Beneficiaries identified for support under the Central government scheme

Street vendors, particularly those delivering vegetables and other edible commodities at the doorsteps of customers in urban areas, are all set to find themselves on a different pitch where they can carry on their business with a lesser interest burden.

Hitherto, according to official sources, such vendors were not eligible to avail loan at an affordable interest rate from recognised financial organisations, as their business was considered as high-risk trade in the unorganised sector by the lending institutions.

A survey conducted by the National Commission for Enterprises in Unorganised Sector way back in 2007 led to a shocking revelation that these vendors, who were taking loans from private lenders at higher interest rate, were able to make a poor profit after a days’ toiling work.

According to the Commission’s report, a male street vendor was able to make a sum of Rs.70 per day while the women were able to generate Rs.40 per day as their remuneration, as a major chunk of the money they generate during the day’s business went to the money lenders as “daily-basis interest” for the capital they had borrowed.

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