Launched on June 1, 2020, by the Ministry of Housing and Urban Affairs (MoHUA), the PM SVANidhi scheme is a central sector scheme designed to provide micro-credit facilities to street vendors. It was conceptualized to help the urban informal sector recover from the economic disruptions caused by the COVID-19 pandemic. The scheme has been extended until March 31, 2030, to ensure the sustained financial inclusion and empowerment of street vendors.
Key Objectives
- Financial Inclusion: To provide affordable collateral-free working capital loans to street vendors.
- Business Revival: To assist vendors in resuming and expanding their livelihood activities.
- Digital Adoption: To promote and incentivize digital transactions through cashback mechanisms.
- Credit Discipline: To encourage regular repayment through interest subsidies and enhanced credit limits for subsequent loan cycles.
Loan Structure and Financial Support
The scheme offers graded loan amounts based on the repayment behavior of the beneficiaries. These loans are collateral-free, meaning no bank can demand security from the vendor.
| Loan Tranche | Maximum Amount | Repayment Tenure |
| First Tranche | Up to ₹15,000 | 12 months |
| Second Tranche | Up to ₹25,000 | 18 months |
| Third Tranche | Up to ₹50,000 | 36 months |
- Interest Subsidy: An interest subsidy of 7% per annum is provided to beneficiaries who repay their loans on time or early. This amount is credited directly to the vendor’s bank account via Direct Benefit Transfer (DBT) on a quarterly basis.
- Digital Incentives: To encourage the move toward a cashless economy, the scheme offers monthly cashback incentives for digital transactions, with potential annual rewards of up to ₹1,600.
- No Prepayment Penalty: There is no financial penalty for vendors who choose to repay their loans ahead of the scheduled tenure.
Eligibility Criteria
The scheme is available to street vendors operating in urban, peri-urban, and rural areas who were vending on or before March 24, 2020.
- Vendor Identification: Vendors must possess a Certificate of Vending (CoV) or an Identity Card issued by the Urban Local Bodies (ULBs).
- Letter of Recommendation (LoR): Vendors identified in a survey but lacking a CoV/ID, or those left out of the initial survey, can apply with a Letter of Recommendation (LoR) issued by the ULB or Town Vending Committee (TVC).
- Geographic Scope: The scheme covers statutory towns, census towns, and peri-urban areas.
- State Compliance: The scheme is primarily for beneficiaries in states and UTs that have notified rules and schemes under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014.
Implementation and Technical Framework
- Implementation Partner: The Small Industries Development Bank of India (SIDBI) acts as the technical partner for the implementation of the scheme, leveraging its network of lending institutions.
- Lending Institutions: Loans are provided through Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks, Cooperative Banks, Non-Banking Financial Companies (NBFCs), Micro-Finance Institutions (MFIs), and Self-Help Group (SHG) banks.
- Digital Portal: A dedicated web portal and mobile app provide an end-to-end solution for the application process, real-time status tracking, and automated subsidy administration.
- SVANidhi se Samriddhi: This is an add-on initiative that links beneficiaries and their families to various central welfare schemes (such as PMAY-U, Jan Dhan Yojana, and health insurance) to provide a holistic social security net.
Notable Features for UPSC Aspirants
- Formalization: The scheme acts as a bridge to formalize the informal urban economy, moving vendors from high-interest private moneylenders to institutional credit.
- RuPay Credit Card: Vendors who successfully repay the second tranche of the loan become eligible for a UPI-linked RuPay Credit Card, providing them with instant, flexible credit for emergency needs.
- Capacity Building: MoHUA facilitates training programs focused on entrepreneurship, financial literacy, and food safety (for street food vendors, in partnership with FSSAI).
- Gender and Social Inclusion: A significant proportion of beneficiaries are women and individuals from marginalized communities (SC, ST, and OBC), underscoring the scheme’s role in social equity.