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PM Svanidhi

Topics Covered: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and bodies constituted for the protection and betterment of these vulnerable sections.

PM Svanidhi

Context:

The Ministry of Housing and Urban Affairs has signed MoU with Small Industries Development Bank of India (SIDBI) in order to engage SIDBI as the Implementation Agency for PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) – a Special Micro-Credit Facility for Street Vendors.

Role of SIDBI:

SIDBI will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

It will develop and maintain a customized and integrated IT Platform providing end-to-end solutions to ensure engagement and information flow between Urban Local Bodies (ULBs), Lending Institutions, Digital Payment Aggregators and other stakeholders.

Overview of the scheme:

  1. It is a special micro-credit facility plan to provide affordable loan of up to ₹10,000 to more than 50 lakh street vendors, who had their businesses operational on or before 24 March.
  2. The scheme is valid until March 2022.
  3. Small Industries Development Bank of India is the technical partner for implementation of this scheme.
  4. It will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises.

Loans under the scheme:

  • Under the scheme, vendors can avail working capital loan of up to ₹10,000, which is repayable in monthly instalments within one year.
  • On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer (DBT) on six-months basis.
  • There will be no penalty on early repayment of loan.

Eligibility:

The scheme is applicable to vendors, hawkers, thelewalas, rehriwalas, theliphadwalas in different areas/contexts who supply goods and services. Street vendors belonging to the surrounding peri-urban/rural areas are also included.

Need for:

The lockdown has affected the lives and livelihoods of many especially daily wagers including street vendors who businesses were affected due to the restrictions.

  • Street vendors usually work with a small capital base taken on very high interest rates from informal sources. Further, they might have consumed their savings and high cost capital during the lockdown.

Therefore, there is an urgent need to provide affordable credit for working capital through formal banking channel to street vendors to help them resume the business.

InstaLinks:

Prelims Link:

  1. Validity of the scheme.
  2. Who implements?
  3. Eligibility under the scheme?
  4. Rate of interest?
  5. What is SIDBI?

Mains Link:

Discuss the significance of PM SVANIDHI scheme.

Striving

Sources: pib.