PM Svanidhi (Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme)

1. Introduction
2. Overview
3. Loans under scheme
4. Implementation agency
5. Eligibility
6. Target Beneficiaries
7. Scheme Benefits
8. Need for

Introduction

• The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) was launched by the Ministry of Housing and Urban Affairs on June 01, 2020 for providing affordable Working Capital loan to street vendors to resume their livelihoodsthat have been adversely affected due to Covid-19 lockdown.
• The duration of the scheme is until March 2022.

Overview:

• 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.
• The the scheme is valid until March 2022.
• Small Industries Development Bank of India is the technical partner for implementation of this scheme.

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.

Implementing agency:

• Last month, the Ministry of Housing and Urban Affairs signed MoU with Small Industries Development Bank of India (SIDBI) in order to engage SIDBI as the Implementation Agency for the scheme.
• SIDBI will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

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.

Target beneficiaries

• This scheme targets to benefit over 50 lakh Street Vendors.
• A vendor, according to the scheme guidelines is 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.

Scheme Benefits

• Vendors can avail 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 quarterly basis.
• There will be no penalty on early repayment of loan.
• The scheme promotes digital transactions through cash back incentives up to an amount of Rs. 100 per month.
• The vendors can avail the facility of escalation of the credit limit on timely/ early repayment of loan.

Need for:

• The lockdown has affected the lives and livelihoods of many especially daily wagers including street vendors whose 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.