The Ministry of Housing and Urban Affairs (MoHUA) recently launched a new initiative called Pradhan Mantri Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi). This scheme is specifically designed to offer affordable loans to street vendors. Originally announced as part of the Economic Stimulus-II under the Atmanirbhar Bharat Abhiyan, PM SVANidhi aims to support vendors, hawkers, and individuals engaged in a diverse range of goods and services, including textiles, apparel, artisan products, barbers shops, laundry services and more.
Eligibility and Loan Facility Details
Those who were vending up until 24th March 2020 are eligible for the benefits of PM SVANidhi. This is the first time an urban livelihood programme has extended benefits to street vendors from peri-urban/rural areas. The scheme, valid until March 2022, allows vendors to avail a working capital loan of up to Rs. 10,000, repayable in monthly instalments within a year. These loans require no collateral.
Unique Features of the Scheme
Notably, this is the first time Microfinance Institutions, Non-Banking Financial Company, and Self Help Groups have been permitted to participate in a scheme for the urban poor due to their on-the-ground presence and proximity to the urban poor, including street vendors. There is no penalty assigned for early repayment of the loan, and support for early repayment is also recognised, as many lending institutions charge penalties for early repayment.
Interest Subsidy and Credit Escalation
An interest subsidy of 7% per annum will be credited to the beneficiaries’ bank accounts through direct benefit transfer every six months on timely/early repayment of the loan. The scheme also provides for the increase of the credit limit if the vendor repays the installments on time or early.
Encouragement of Digital Transactions and Capacity Building
The scheme encourages the use of digital transactions by street vendors by providing monthly cash back incentives. MoHUA, in collaboration with State Governments, will launch a capacity building and financial literacy programme to benefit all stakeholders.
The Role of Urban Local Bodies (ULBs) and Use of E-Governance
ULBs hold significant roles in implementing the scheme by ensuring targeted beneficiaries are reached efficiently. In line with leveraging technology for effective delivery and transparency, a digital platform is under development to administer the scheme. This platform aims to integrate the web portal/mobile app with the UdyamiMitra portal of SIDBI for credit management and the PAiSA portal of MoHUA to administer interest subsidy automatically. This technological approach will facilitate vendor integration into the formal financial system.
Way Forward
The loans accessed through PM SVANidhi will help resurrect activity for vendors who have lost income due to Covid-19. Despite existing schemes for street vendors, gaps remain in implementation, identification, awareness, and accessibility. Rectifying these deficiencies in a timely manner is crucial. Further benefits such as maternity allowances, accident relief, natural death compensation, education support for children for higher studies, and pension during crises should also be made available to them.
