The COVID-19 pandemic and lockdowns disrupted businesses across the economic spectrum in India, but street vendors were perhaps the hardest hit. Dependent on daily sales, most of these micro-entrepreneurs saw incomes evaporate overnight when cities shut down.
To provide urgent relief, the Government of India launched the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme in June 2020. With street vendors largely ignored thus far in policy actions and financial inclusion drives, this first-of-its-kind central scheme focuses specially on their rehabilitation.
PM SVANidhi Framework
- Collateral-free working capital loans up to Rs 10,000
- Annual interest subsidy @ 7%
- Cashback incentives for regular repayment
- Improved access to other social welfare schemes
The scheme aims to help street vendors resume their livelihoods after COVID-induced income shocks. Early data indicates the special needs-based loans under PM SVANidhi have provided a leg-up to vulnerable street vendors.
The Income Impact
An IWWAGE-CEF study in 2022 surveyed over 1600 PM SVANidhi beneficiaries across 23 cities to analyze the scheme’s impact. The key income boost finding:
- The first loan of Rs 10,000 under the scheme increases a vendor’s average annual earnings by Rs 23,460
- This implies a 234% rate of return on the loan amount through income growth
| Parameter | Income (in Rs) |
| Annual Earnings before PM SVANidhi | 16,800 |
| Annual Earnings after getting PM SVANidhi (Year 1) | 40,260 |
Extrapolating this impact to the nearly 8 million loans disbursed under PM SVANidhi as of September 2022, the scheme has boosted the aggregate annual incomes of beneficiaries by over Rs 150,000 crore so far!
The survey highlights that the three main drivers of this income growth are:
- Ability to rebuild capital after COVID losses
- Invest in more inventory and better equipment
- Move to better locations for vending
Widening Financial Access
By requiring bank accounts and documentation for enrolling, PM SVANidhi has also pushed wider formal financial access for marginalized communities that have traditionally remained outside the banking fold.
- Over 3 million PM SVANidhi vendors did not have prior bank accounts
- 97% of those surveyed now have bank accounts
- 24% of beneficiaries have availed other loans after getting PM SVANidhi
- 33% now save formally compared to 14% earlier
This early data makes a strong case for specialized credit facilities for vulnerable informal worker groups rather than one-size-fits all schemes. It also underscores the need for continued policy focus on last-mile financial inclusion.
- The gains under PM SVANidhi reveal that small unconditional loans and market linkages can empower enterprises in the informal economy to meaningfully boost incomes.
- As India gears up for the Amrit Kaal goal of becoming a developed nation, such initiatives to unlock the productivity potential at the grassroots through financial access will be pivotal.
PM SVANidhi Scheme Reach
- Over 3.82 crore applications received under the scheme as of February 2023
- 2.93 crore loans sanctioned so far
- Loans disbursed to over 2.6 crore street vendors
- 10% of beneficiaries are from SC/ST communities
- Saras Fairs organized in over 800 clusters to connect beneficiaries to market opportunities
Use of Funds
- 65% vendors used loans to buy new stock, raw materials
- 15% invested in paying off old debts
- 11% spent on family essentials like food, health and education
- 9% used funds to buy new vending equipment or upgrade tools
Vendor Earnings Growth
- Average weekly business earnings boosted by 30% after availing loan
- Earnings growth higher for daily-use perishable goods vendors at 37%
- Over 55% respondents reported income growth to Aadhaar-linked bank accounts
Special Impact
- Study shows 10% points higher workplace participation for women beneficiaries
- Better diet diversity for 70% households
- Improved business confidence for 80% vendors after 1 loan cycle
By sustainably expanding credit access beyond traditional business environments to communities in informal economies, focused interventions like PM SVANidhi hold valuable lessons for increasingly vulnerable sections globally.
