The Indian Government initiated PM SVANidhi (PM Street Vendor’s AtmaNirbhar Nidhi) Scheme to help street vendors, hawkers and road sellers affected by the COVID-19 pandemic. With the imposition of lockdowns and restrictions on the movement of people, their businesses came to a standstill, resulting in severe financial distress. In many cases, their daily income was reduced to almost zero, as they were unable to conduct their businesses and earn their livelihoods.
As the majority of street vendors and hawkers belong to the informal sector, they do not have access to formal credit and financial services. Therefore, they faced difficulties in accessing working capital to restart their businesses.
The PM SVANidhi Scheme comes as a ray of hope for such street vendors and hawkers. It provides them working capital loans of up to ₹10,000 at low-interest rates for a period of one year to restart their businesses. The repayment of the loan can be made in monthly instalments, and there are no extra charges for prepayment. In fact, the beneficiaries are eligible for higher loans of ₹20,000 and ₹50,000 if they repay the first loans on time.
Additionally, when the vendor repays the loan amount on or before the scheduled date, they are eligible for a subsidy on the interest amount. Also, the government allows street vendors to check the PM SVANidhi loan status online, making the process transparent and convenient.
This collateral-free loan can be used for various purposes, including working capital, purchase of raw materials, inventory and other equipment. The scheme also aims to promote digital transactions and financial literacy, which will enable street vendors to become self-reliant.
As of March 04, 2023, the PM SVANidhi Scheme has provided a loan of ₹10,000 to more than 34.13 Lakh street vendors. A loan of ₹20,000 has been credited to over 7.64 Lakhs of vendors in the second tranche. Additionally, 24,487 beneficiaries of the second loan have been granted a loan of ₹50,000 in the third tranche, further boosting their businesses. By December 2024, the government plans to extend the scheme’s benefits to 42 Lakh beneficiaries.
Objectives of PM SVANidhi Scheme
The PM SVANidhi Scheme is designed to assist street vendors by offering affordable loans and incentives for prompt repayment. The initiative aims to help these individuals become self-reliant and contribute to economic growth.
Affordable Working Capital Loan:
The scheme provides much-needed financial assistance to street vendors and hawkers, who do not have access to formal credit. The loans help them meet their working capital requirements, purchase new inventory and resume their livelihoods.
Incentivize Regular Repayment:
By offering incentives for prompt repayment of loans, the scheme helps to encourage regular repayment of loans. It also promotes a sense of moral responsibility and ensures that street vendors do not default on their loans.
Promote Digital Transactions:
The scheme aims to promote financial inclusion and encourage the adoption of digital payment methods among street vendors and hawkers. It provides monthly cashback to those who opt for digital repayment of loans. The scheme also helps in bringing them into the formal banking system.
Benefits of PM SVANidhi Scheme
The PM SVANidhi Scheme offers several additional benefits to street vendors, which are listed below.
Collateral Free Loans:
Street vendors often do not have any assets to pledge as collateral for obtaining loans from banks. The collateral-free loan of PM SVAnidhi Scheme makes it easier for them to access credit and obtain working capital without pledging anything upfront. After applying for a loan, street vendors can also check PM SVANidhi loan status by visiting the scheme’s official website and access the relevant information.
Under the digital promotion initiative, vendors will receive a monthly cashback of up to 100 based on the number of eligible transactions they execute each month. The cashback scheme offers ₹50 for the first 50 eligible transactions, ₹75 for the next 50, and ₹100 for the next 100 transactions. The initiative aims to encourage digital transactions and promote the use of digital payment methods.
The scheme offers vendors an interest subsidy of 7% per annum on early or timely repayment of the loan. The subsidy is credited to the bank accounts of beneficiaries through direct benefit transfers on a quarterly basis. It adds to the savings of these vendors and improves their cash flow to invest more in business.
The government has simplified the collateral-free loan application process of the PM SVAnidhi program, making the scheme more accessible to street vendors. Those who are eligible for the working capital loan can visit PM SVANidhi and furnish the necessary details to file the loan application.
Eligibility Criteria of PM SVANidhi Scheme
Street vendors who were engaged in vending in urban areas on or before March 24, 2020, are eligible to avail of the PM SVANidhi collateral-free loan. Eligibility for street vendors is determined by four categories:
Certificate of Vending/Identity Card Holders:
The first category includes street vendors who hold a certificate of vending/identity card issued by Urban Local Bodies (ULBs).
Surveyed but Not Issued Certificate of Vending/Identity Card:
The second category is for street vendors who have been identified in a survey but have not been issued a certificate of vending/identity card.
Letter of Recommendation for Unidentified Vendors:
The third category includes street vendors who have not been identified in the survey or started vending after the survey’s completion but have been issued a Letter of Recommendation (LoR) by the ULB/Town Vending Committee (TVC). However, this service is yet to be launched.
Letter of Recommendation for Vendors Near Developing Cities:
The fourth category includes vendors who work within the limits of the ULBs and are located nearby to developing cities or on the boundaries of rural-urban areas. They have been issued a Letter of Recommendation (LoR) by the ULB/TVC to that effect.
Interest Rates on Loans on PM SVANidhi Scheme
Interest rates for PM SVANidhi collateral-free loans vary depending on the type of lending institution.
- In scheduled commercial banks, regional rural banks, small finance banks, self-help groups and cooperative banks, the applicable interest rate is based on the rates offered for similar loans.
- Non-banking financial companies, micro-finance institutions and non-banking financial companies offer interest rates as per RBI guidelines for their respective categories.
Documents for Application of PM SVANidhi Scheme
To apply for a collateral-free loan under the PM SVANidhi Scheme, you must possess the following documents.
Proof of Vending:
The beneficiary must provide proof of vending which can be a Vendor ID card (VID), a Certificate of Vending (CoV), or a Town Vending Committee (TVC) Letter of Recommendation. These documents verify that the beneficiary is engaged in street vending.
The beneficiary must submit Know Your Customer (KYC) documents which may include Aadhaar Card, voter ID, driving licence, or PAN Card. These documents are used to verify the beneficiary’s identity and address.
Aadhaar Linked Bank Account:
The beneficiary must have an Aadhaar-linked bank account, which is used to disburse the loan amount. The account should be in the beneficiary’s name and registered with the bank to receive payments electronically.
Mobile Number Linked with Aadhaar:
The beneficiary must have a mobile number linked with their Aadhaar card. The mobile number is used to communicate important information related to the loan.
How to Apply for PM SVANidhi Scheme?
To apply for a working capital loan under the PM SVANidhi Scheme, a vendor can follow the below steps using pointers:
- Visit the PM SVANidhi website.
- Click on “Apply Loan 10K” on the homepage of the website.
- Enter your mobile number and verify the captcha box.
- Request an OTP and enter the OTP received on your mobile phone.
- Verify your Aadhaar number by entering the OTP received on your Aadhaar-linked mobile number.
- Select the ‘Vendor’ category and upload the required documents.
- Fill out the loan application form by providing your name, address, vending activity, etc.
- Submit the form and note down the application number for future reference.
By following these pointers, vendors can easily apply for a loan under the PM SVANidhi Scheme and obtain the necessary financial assistance to grow their businesses.
How to Check PM SVANidhi Loan Status?
To check the PM SVANidhi loan status application, street vendors need to take the following steps:
- Visit the official website of PM SVANidhi.
- Enter their login ID and password.
- Their PM SVANidhi loan status will appear on the screen
Thanks to the PM SVANidhi Scheme’s working capital loans, street vendors can now revitalise their businesses and thrive in the marketplace. These loans are highly beneficial, cost-efficient, and offer significant rewards, providing vendors with the necessary funds to resume their lives with optimism and minimal stress. By availing of these loans, street vendors can access the financial flexibility they need to rebuild their businesses and achieve prosperity.