The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) is a special micro-credit facility launched by the Ministry of Housing and Urban Affairs (MoHUA), Government of India, to provide affordable working capital loans to street vendors. This scheme aims to support the urban informal economy and help street vendors become self-reliant, especially in the aftermath of the COVID-19 pandemic. This piece provides an overview of the scheme’s guidelines, objectives, and implementation.
Background and Objectives
Street vendors are a vital part of the urban informal economy, providing essential goods and services at affordable rates. The COVID-19 pandemic severely impacted their livelihoods, necessitating immediate financial assistance. The PM SVANidhi scheme was launched to:
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Provide working capital loans of up to ₹10,000 to street vendors.
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Incentivize regular repayment of loans.
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Promote digital transactions among street vendors.
Eligibility Criteria
The scheme is available for street vendors in states/UTs that have notified Rules and Scheme under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. The eligible vendors include:
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Street vendors identified in the survey with a Certificate of Vending or Identity Card.
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Vendors who have not been issued a Certificate of Vending but are identified in the survey.
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Street vendors left out of the survey, who have a Letter of Recommendation from the ULB/Town Vending Committee (TVC).
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Vendors from surrounding peri-urban/rural areas, with a Letter of Recommendation from the ULB/TVC.
Identification of Beneficiaries
To identify eligible vendors, the following methods are used:
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Lists prepared by Urban Local Bodies (ULBs) based on surveys.
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A system-generated request to ULBs for verification of credentials.
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Membership details from associations of street vendors.
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Documentary evidence of vending.
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Reports from local inquiry.
Brief Details of the Product
The scheme provides a working capital loan of up to ₹10,000 with a tenure of one year, repayable in monthly installments. No collateral is required for the loan.
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Loan Amount: Up to ₹10,000.
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Repayment Tenure: One year.
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Collateral: No collateral required.
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Interest Subsidy: An interest subsidy of 7% is provided.
Rate of Interest and Interest Subsidy
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Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, and SHG Banks: Interest rates will be as per their prevailing rates.
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Non-Banking Financial Companies (NBFCs) and Microfinance Institutions (MFIs): Interest rates will be as per RBI guidelines.
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Interest Subsidy: Eligible vendors receive a 7% interest subsidy, credited quarterly. The subsidy is available up to March 31, 2022, and may be extended.
Promotion of Digital Transactions
The scheme encourages digital transactions through a cash-back facility. Vendors are incentivized to use digital payment platforms like BHIM, PhonePe, etc.
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Cash-back Incentives: Vendors receive cash-back of ₹50 for 50 eligible transactions, ₹25 for the next 50, and ₹25 for the next 100 transactions.
Who Can Lend?
Loans can be provided by:
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Scheduled Commercial Banks
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Regional Rural Banks (RRBs)
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Small Finance Banks (SFBs)
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Cooperative Banks
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Non-Banking Financial Companies (NBFCs)
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Microfinance Institutions (MFIs)
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SHG Banks
Credit Guarantee
The scheme provides a credit guarantee through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The guarantee covers:
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100% of the first loss default (up to 5%).
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75% of the default amount beyond 5% and up to 15%.
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A maximum guarantee cover of 15% of the year portfolio.
Formation of Collectives of Vendors
The scheme encourages the formation of Joint Liability Groups (JLGs) of street vendors, which can be converted into Common Interest Groups (CIGs). This facilitates better access to credit and promotes collective action.
E-commerce and Quality Improvement
The scheme also aims to build the capacity of street vendors to conduct e-commerce and obtain necessary quality certifications from agencies like FSSAI.
Integrated IT Application for Scheme Administration
An integrated IT platform with a mobile app is developed for scheme administration. This portal integrates data from ULBs, lending institutions, and digital payment aggregators.
Implementation Partners
The Small Industries Development Bank of India (SIDBI) is the implementation partner for the scheme.
Committees for Steering and Monitoring
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Central Level: A Steering Committee is formed under the Chairmanship of Secretary, MoHUA.
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State/UT Level: A committee is headed by the Principal Secretary/Secretary, Urban Development/Municipal Administration.
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City/ULB Level: A Town Vending Committee (TVC) is set up to sponsor loan applications.
Conclusion
The PM SVANidhi scheme is a crucial initiative for providing financial support and promoting self-reliance among street vendors. By offering collateral-free loans, incentivizing digital transactions, and ensuring access to credit, the scheme aims to empower street vendors and contribute to the growth of the urban informal economy. The scheme’s focus on inclusion and easy access makes it a valuable tool for promoting economic stability and resilience.