The PM SVANidhi Scheme, also known as the PM Street Vendor’s AtmaNirbhar Nidhi, was launched in June 2020 to address the severe economic challenges faced by street vendors during the COVID-19 pandemic. The lockdowns disrupted livelihoods across sectors, but the street vendors, who rely on a modest capital base for their daily operations, were among the hardest hit. This initiative aims to provide them with the financial support necessary to revive their businesses and sustain their livelihoods.
The Significance of Street Vendors in Urban Economies
Street vendors are an integral part of the urban informal economy. They play a crucial role in providing affordable goods and services to city dwellers. Known by various names such as thelewala, hawkers, theliphadwala, rehriwala, etc., these vendors offer a diverse range of products and services. These include:
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Goods: Vegetables, fruits, ready-to-eat street food, pakodas, tea, bread, textiles, footwear, apparel, artisan products, and stationery.
Services: Barber shops, pan shops, cobblers, and laundry services.
The PM SVANidhi scheme recognizes the importance of these vendors and aims to empower them financially through accessible and affordable credit facilities.
Objectives of the PM SVANidhi Scheme
The primary goals of the scheme are:
Providing Working Capital Loans: To offer street vendors working capital loans up to ₹10,000 at a subsidized interest rate.
Encouraging Regular Loan Repayment: To incentivize vendors for timely repayment of loans.
Promoting Digital Transactions: To reward vendors for adopting and utilizing digital payment systems.
Eligibility Criteria for the PM SVANidhi Scheme
The scheme is designed to benefit every street vendor operating in urban areas before March 24, 2020. The eligibility criteria include:
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Identity Card or Certificate of Vending:
Vendors possessing these documents issued by Urban Local Bodies (ULBs) are eligible.
Surveyed but Uncertified Vendors:
Vendors identified in ULB-led surveys but lacking the certificate of vending can obtain a Provisional Certificate of Vending.
Unsurveyed or Recently Established Vendors:
Vendors excluded from the survey or those who started vending post-survey must secure a Letter of Recommendation (LoR) from the ULB or Town Vending Committee (TVC).
Peripheral Vendors:
Vendors from surrounding rural or peri-urban areas operating within ULB limits are also eligible if they hold a valid LoR from the ULB or TVC.
Benefits of the PM SVANidhi Scheme
The PM SVANidhi scheme provides a range of benefits to urban street vendors, helping them stabilize and grow their businesses.
1. Access to Working Capital Loans
Vendors can avail of working capital loans of up to ₹10,000 with a tenure of one year.
These loans are collateral-free and repayable in monthly installments.
Timely or early repayment makes vendors eligible for enhanced credit limits in subsequent cycles.
No prepayment penalty is charged for early repayment.
2. Interest Rates
Scheduled Commercial Banks, Small Finance Banks (SFBs), Regional Rural Banks (RRBs), Cooperative Banks, and SHG Banks:
The interest rates are determined by the respective institution’s prevailing rates.
Non-Banking Financial Companies (NBFCs) and NBFC-Micro Finance Institutions (NBFC-MFIs):
Interest rates follow RBI guidelines for these lender categories.
Other Lenders (Non-NBFC MFIs):
Interest rates align with the RBI’s directives for NBFC-MFIs.
3. Interest Subsidy
Vendors availing loans under the scheme are entitled to an interest subsidy of 7%.
The subsidy amount is credited directly to the vendor’s account on a quarterly basis.
This subsidy applies to both the initial loan and any enhanced loans availed before March 31, 2022.
4. Incentives for Digital Transactions
Vendors are encouraged to adopt digital payment systems through cashback incentives.
Partner platforms include Paytm, NPCI (BHIM), Google Pay, Amazon Pay, BharatPe, PhonePe, among others.
Vendors onboarded for digital transactions can earn monthly cashback ranging from ₹50 to ₹100.
How to Apply for the PM SVANidhi Scheme
The application process for the PM SVANidhi scheme is straightforward and designed to ensure maximum accessibility for street vendors.
Contact a Banking Correspondent (BC) or MFI Agent:
Vendors can approach a local BC or agent from a Micro Finance Institution (MFI).
The list of authorized agents is available with the ULBs.
Submission of Application:
The BCs or MFI agents assist vendors in filling out the application forms.
Documents are uploaded through a mobile app or relevant online portals.
Required Documents
To apply for the working capital loans, vendors must provide the following documents:
Identity Proof:
Certificate of Vending or ID card issued by ULBs, or
Letter of Recommendation from ULB or TVC.
KYC Documents (any one of the following):
Aadhaar Card
Voter ID Card
Driving License
MGNREGA Job Card
PAN Card
The Impact of PM SVANidhi Scheme
The PM SVANidhi scheme is a pioneering initiative aimed at uplifting one of the most vulnerable sections of society—the street vendors. By offering collateral-free loans, subsidized interest rates, and digital payment incentives, the scheme not only ensures the financial inclusion of street vendors but also helps them embrace the digital economy.
Empowering Street Vendors
Access to timely credit helps vendors revive their businesses and expand their operations.
Enhanced loan limits in subsequent cycles encourage sustainable growth.
Digital Transformation
Cashback incentives motivate vendors to adopt digital transactions, contributing to the broader goal of a Digital India.
Increased use of digital payment platforms reduces the reliance on cash, improving operational efficiency.
Social and Economic Contributions
By supporting street vendors, the scheme strengthens the urban informal economy.
Affordable and accessible goods and services continue to be available to city dwellers, ensuring economic equilibrium.
Conclusion
The PM SVANidhi scheme is a transformative measure aimed at providing financial support and empowering street vendors. It addresses critical issues such as access to affordable credit, adoption of digital transactions, and economic resilience. By focusing on the welfare of street vendors, the scheme not only aids their recovery from the setbacks of the pandemic but also integrates them into the formal financial and digital ecosystems.
For the urban poor, the PM SVANidhi scheme represents a lifeline, fostering self-reliance and economic independence. Its implementation underscores the government’s commitment to inclusive growth and its vision of an AtmaNirbhar Bharat (Self-Reliant India).
