PM SVANidhi Scheme

  • PM SVANidhi is Central Sector Scheme, launched by the Ministry of Housing and Urban Affairs on June 01, 2020.
  • Purpose: To provide affordable Working Capital loans to street vendors to resume their livelihoods that have been adversely affected due to the Covid-19 lockdown.
  • It is a micro-credit facility that provides street vendors with a collateral-free loan of Rs 10,000 with low rates of interest (below 12%) for a period of one year, aiding the vendors in getting back on their feet financially.
  • In the long term, it aims at –
    • Establishing a credit score for the vendors
    • Creating a digital record of their socio-economic status.
  • This will enable street vendors to avail the Central government schemes later, formalise the informal sector of the economy and provide them safety nets and a means of availing loans in the future.
  • The duration of the scheme initially was until March 2022. It has been extended till December 2024, with a focus on enhanced collateral-free affordable loan corpusincreased adoption of digital transactions and holistic socio-economic development of the Street Vendors and their families. 
  • Lending Agencies:
    • Microfinance Institutions, Non-Banking Financial Company, Self Help Groups have been allowed due to their ground level presence and proximity to the urban poor including the street vendors.
  • Eligibility:
    • The Scheme is available to all street vendors engaged in vending in urban areas.
      • Earlier the Scheme was available to all street vendors engaged in vending on or before March 24, 2020.
    • As per the Street Vendors Act 2014, the Town Vending Committees (which comprises the local authorities and vendors from an area) issue a certificate of vending after a survey has been conducted of all the vendors.
    • States/Union Territories (UTs):
      • The Scheme is available for beneficiaries belonging to only those States/UTs which have notified Rules and Scheme under Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014.
      • Beneficiaries from Meghalaya, which has its own State Street Vendors Act may, however, participate.
  • Performance of the scheme:
    • Data on the PM-SVANidhi portal (February 10, 2024) showed that 60.65 lakh first-term loans, 16.95 lakh second-term loans and 2.43 lakh third-term loans have been disbursed so far under the scheme.

PM SVANidhi Scheme Benefits

  • Vendors can avail of a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year.
  • On timely/ early repayment of the loan, an interest subsidy @ 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on a quarterly basis. Here will be no penalty on early repayment of loan.
  • On timely repayment of the first loan, higher loan eligibility of Rs.20,000 and Rs.50,000 in the second and third tranches respectively.
  • The scheme promotes digital transactions through cash back incentives up to an amount of Rs. 100 per month (i.e. INR 1200/- per annum).
  • The vendors can avail the facility of escalation of the credit limit on timely/ early repayment of loan.
  • Implementation agencySmall Industries Development Bank of India (SIDBI).
    • Along with the Ministry of Housing and Urban Affairs, the Small Industries Development Bank of India (SIDBI) will be implementing the scheme.
    • Urban Local Bodies (ULBs): Helps beneficiaries by reaching them to connect under the scheme efficiently.
  • E-governance:
    • Encourage Digital Transactions:
      • The scheme incentivises digital transactions by the street vendors through monthly cash back.
    • Transparency:
      • In line with the vision of leveraging technology to ensure effective delivery and transparency, a digital platform with web portal/ mobile app is being developed to administer the scheme with end-to-end solution.
        • This platform will integrate the web portal/ mobile app with UdyamiMitra portal of SIDBI for credit management and PAiSA portal of MoHUA to administer interest subsidy automatically.
    • Financial Inclusion:
      • It will help in integrating the vendors into the formal financial system.
  • Focus on Capacity Building:
    • MoHUA in collaboration with State Governments will launch a capacity building and financial literacy programme of all the stakeholders and Information, Education and Communication (IEC) activities throughout the country.
Who is a Street Vendor/hawker?
  • Any person engaged in vending of articles, goods, wares, food items or merchandise of daily use or offering services to the public in a street, footpath, pavement etc., from a temporary built up structure or by moving from place to place.
  • The goods supplied by them include vegetables, fruits, ready-to-eat street food, tea, pakodas, breads, eggs, textile, apparel, artisan products, books/ stationary etc. and the services include barber shops, cobblers, pan shops, laundry services etc.
  • Around 49.48 lakh street vendors have been identified in India.
    • Uttar Pradesh has the maximum at 8.49 lakh, followed by Madhya Pradesh at 7.04 lakh.
    • Delhi has only 72,457 street vendors.
    • No street vendor has been identified in Sikkim.
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