PM Svanidhi

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The lockdowns due to the COVID-19 pandemic adversely impacted the livelihoods of everyone, especially the street vendors. The street vendors usually work with a small capital base. Their savings and capital base would have been consumed during the lockdown in the country.

The street vendors are an important part of the urban informal economy. They play a huge role in ensuring the availability of services and goods at affordable prices to the city dwellers. 

The street vendors are known as vendors, thelewala, hawkers, theliphadwala, rehriwala, etc. in different areas and contexts. They supply goods that include vegetables, ready-to-eat street food, fruits, pakodas, tea, bread, textile, footwear, apparel, artisan products, stationery etc. Their services include barber shops, pan shops, cobblers, laundry services, etc. Thus, an urgent need arose to provide them credit for working capital to resume their business. 

The PM Street Vendor’s AtmaNirbhar Nidhi (PM Svanidhi) scheme was launched by the government in June 2020 to provide credit for working capital to the street vendors. Under this scheme, the street vendors can take collateral-free loans with low-interest rates for one year.

Objectives Of PM Svanidhi Scheme

  • To facilitate and provide working capital loans up to Rs.10,000 at a subsidised rate of interest, 
  • To incentivise regular repayment of the loan, and 
  • To reward digital transactions.

Eligibility Criteria Of PM Svanidhi Scheme

The PM Svanidhi scheme is available to every street vendor working in urban areas on or before 24 March 2020. The beneficiaries under this scheme will be identified according to the following criteria:

  • Street vendors in possession of an Identity card or Certificate of Vending issued by Urban Local Bodies (ULBs).
  • Street vendors identified in the survey but have not been issued the Certificate of Vending or Identity Card. In such cases, the Provisional Certificate of Vending will be generated for the street vendors. 
  • Street Vendors left out of the ULB led identification survey or who have started vending after the completion of the survey but have been issued with the Letter of Recommendation (LoR) by the ULB  or Town Vending Committee (TVC). 
  • Street vendors of the surrounding development or rural or peri-urban areas vending in the geographical limits of the ULB and have been issued with the Letter of Recommendation (LoR) by the ULB or TVC.

Benefits Under PM Svanidhi Scheme

The following are the benefits provided to the urban street vendors under the PM Svanidhi scheme:

Working Capital Loans

The urban street vendors can avail of a Working Capital (WC) loan of up to Rs.10,000 with a tenure of 1 year repaid in monthly instalments. No collateral is required to avail of this loan. On early or timely repayment of this loan, the street vendors will be eligible for the next cycle of the WC loan with an enhanced limit. There is no charge of prepayment penalty for the repayment of the WC loan before the scheduled date. 

Rate of Interest

In the case of Scheduled Commercial Banks, Small Finance Banks (SFBs), Regional Rural Banks (RRBs), Cooperative Banks and SHG (self-help groups) Banks, the rate of interest will be as per their prevailing rates of interest. 

In the case of Non-Banking Financial Company (NBFC), Non-Banking Financial Company-Micro Finance Institution (NBFC-MFIs), etc., the interest rates will be as per the RBI guidelines for the respective lender category. 

In respect of MFIs (non-NBFC) and other lender categories that are not covered under the RBI guidelines, the interest rates would be applicable as per the extent of the RBI guidelines for NBFC-MFIs. 

Interest Subsidy 

The street vendors who avail of WC loan under the scheme can get an interest subsidy at 7%. The interest subsidy amount is credited to the borrower’s account quarterly. The interest subsidy is available up to 31 March 2022. The interest subsidy is available on first and the subsequent enhanced loan up to that date. 

Promotion of Digital Transactions by Street Vendors 

This scheme provides an incentive for adopting digital transactions by street vendors through the cash-back facility. The network of lending institutions and the digital payment aggregators such as Paytm, NPCI (for BHIM), GooglePay, AmazonPay, BharatPay, PhonePe, etc., will help to onboard the vendors for digital transactions. The onboarded vendors will receive incentives in the form of a monthly cashback in the range of Rs.50 to Rs.100.

Application For Loan Under PM Svanidhi Scheme

To apply for WC loans under the PM Svanidhi scheme, the street vendors need to approach a Banking Correspondent (BC) or Agent of Micro Finance Institution (MFI) of their area. The ULBs will have a list of these persons. They will help the street vendors to fill up the application form and upload the documents in a Mobile app or the respective portals. 

The KYC documents required to apply for loans are as follows:

  • Certificate of Vending or ID card issued by ULBs or Letter of Recommendation from ULB or TVC.
  • Any one of the following-
    • Aadhaar card.
    • Voter Identity card.
    • Driving license.
    • MNREGA card.
    • PAN card.
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