What Is PM SVANidhi Scheme?
PM SVANidhi Scheme is the Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme. In such a time of lockdown when streets are closed. But what about those street sellers and vendors whose lives depended on those streets? How are they surviving this ‘halt’ in life?
On 1 June 2020, the Ministry of Housing and Urban Affairs launched the greatly required PM Street Vendor’s AtmaNirbhar Nidhi, also known as PM SVANidhi Scheme. Pm SVANidhi Scheme is specially designed for street vendors whose lives are depending upon the street.
The main motive of this scheme is to deliver funds for the working capital to the street vendors of the country. Through this scheme, they can take loans for one year. This loan will be collateral-free and provided at the low-interest rates.
PM SVANidhi scheme helps vendors to resume their stopped business and livelihoods that have been impacted due to the lockdown. The enrolling period of the PM SVANidhi scheme is till March 2022.
PM SVANnidhi Scheme Target beneficiaries:
The target of this scheme is to provide benefits to more than 50 lakh Street Vendors. The target beneficiaries of the PM SVANidhi scheme are as follows-
- Individuals delivering services to the public in a street, footpath, pavement, etc.
- A person engaged in vending of articles, goods, wares, food items, or merchandise of daily use.
- Includes vegetables, fruits, ready-to-eat street food, tea, pakodas, bread, eggs, textile, apparel, artisan products, stationery, etc.
- Services include cobblers, barbershops, laundry services, pan shops, etc.
PM SVANidhi Scheme Features:
- PM SVANidhi scheme is a scheme of Central Sector
- This scheme is financed by the Central Ministries
- Individuals can enroll in the scheme until March 2022
- Vendors working in urban, rural, or semi-urban areas before March 2020 can apply for the loan
- About Rs. 10,000 of working capital will be provided
- Vendors can get higher loan amounts on early repayment of the loan
- To promote Digital Transactions vendors shall be provided cashback ranging from Rs. 50 to Rs 100
- The loans under this scheme are completely collateral-free
What Are The Objectives of PM SVANidhi Scheme?
The structure of loans under this scheme is kept simple and easy to understand. The prospect of the Pradhan Mantri SWANidhi scheme is to secure the nearer future of vendors and execute the use of technology.
- Working Capital Loan: The main objective of this scheme is to provide a working capital loan of Rs. 10,000 at subsidized rates of interest to the eligible ones.
- Digital Transactions are Rewarded: This creates awareness, helps to maintain safety protocols in times of a virus outbreak, brings everyone to the same platform, and at the same time rewards the vendors with cashback that helps them financially and encourages them to take a step towards Digitalization.
- Incentivize Regular Loan Repayment: The lives of daily wagers are not easy, taking a loan can help their situations but repaying the loan becomes a nightmare in their lives. Incentivizing the timely loan repayment encourage them morally and makes the process easier, beneficial, and cost-efficient.
PM SVANidhi Scheme Benefits:
- Vendors can avail working funds up to Rs. 10,000
- These working funds are repayable in monthly installments in the period of one year
- On timely/ early repayment of the loan, an interest subsidy of 7% per annum
- This amount will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on a quarterly basis
- There will be no penalty on the early repayment of the loan
- The scheme promotes Digital Transactions through cashback incentives up to an amount of Rs. 100 per month
- The vendors can avail the facility of escalation of the credit limit on timely/ early repayment of loans
PM SVANidhi Scheme Eligibility Criteria:
Eligibility criteria for Pradhan Mantri SVANidhi Scheme are as follows-
- The vendor must possess the Certificate of Vending
- The vendor must have been recognized by the Urban Local Bodies or have ULB issued an identity card
- The provisional vending certificate will be provided to the vendors who have been identified in the survey but haven’t received an Identity card
- Individuals with issued Letter of Recommendation (LoR) by the ULB or TVC (Town Vending Committee) are also eligible
- The vendors residing and active in the surrounding peri-urban or rural areas
- ULB/TVC Verified vendors who left their area of operation due to COVID-19
Documents Required by the ULBs to Generate LoR:
LoR is essential for the vendors who left out of the surveys. Documents required to get the Letter of Recommendation (LoR) by the Urban Local Bodies (ULB) and Town Vending Committee (TVC) are as follows-
- ULB application form with candidate details
- Membership details of those individuals with any of these:
- National Association of Street Vendors of India (NASVI)
- National Hawkers Federation (NHF)
- Self-Employed Women’s Association (SEWA)
- Any documents that claim the individual’s vending career
- Report of local inquiries conducted by TVC
- ULB involving community-based organizations and/ or Self-Help Groups (SHGs)
- The ULBs are to verify the candidates within 15 days of submission of application by the candidate
Documents Required for PM SWANidhi Scheme:
Documents required for application of the PM SWANidhi Scheme are as follows-
- Certificate of Vending
- Identity card
- Letter of Recommendation verified by the ULB or TVC
- Identity Proof and Address Proof by any one of the following:
- Aadhaar Card
- Voter Id
- Ration Card
- Driving License
- PAN Card
- MNREGA Card
List of Lending Institutions:
Some banks are chosen to reach the general masses. The list of all the lending institutions partnered with the scheme are as follows-
- Scheduled Commercial Banks
- Small Finance Banks (SFBs)
- Regional Rural Banks (RRBs)
- Cooperative Banks
- Self-help group Banks (SHG)
- Micro Finance Institutions (MFIs)
- Non-Banking Financial Companies (NBFCs)
Rate of Interest:
|Lending Institution||Rate of Interest|
|Scheduled Commercial BanksRegional Rural Banks (RRBs)Small Finance Banks (SFBs)Co-operative BanksSelf-Help Group Banks (SHG)||As per their prevailing rates of interest|
|Non-Banking Financial Companies (NBFCNon-Banking Financial Companies – Microfinance Institutions (NBFC-MFI)||Interest rates as directed by the RBI for the respective category of the lender|
|Micro Finance Institutions (Non-NBFC)||Interest rate same as directed by RBI for NBFC-MFIs|
Every financial year is divided quarterly and each quarter ends on June 30, September 30, December 31, and March 31. On these mentioned days, the lenders will have to submit claims for the interest subsidies. All the vendors availing of the loan under the SVANidhi Scheme will become eligible for a 7% interest subsidy which then will be transferred directly to their bank’s account. There are some points that one will need to keep in mind-
- In case of early repayment, the subsidy shall be credited to the borrower’s account in one go.
- The subsidy will be available till 31st March 2022 and on the first and thereafter subsequent amplified loans till the given date.
- The subsidy will only be accepted in respect of Standard (non-NPA) accounts of the borrowers and only in the months of the concerned quarters where the account remains Standard.
The scheme provides credit risk relief to the lenders for all the loans approvals which are administered by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This will be operated on a portfolio basis wherein the periodicity of lending institutions filing claims will be quarterly. Detailed information about the portfolio is as follows-
- For up to 5% first loss default: 100%.
- For beyond 5% up to 15% second loss: 75% of default portfolio.
- A maximum of 15% of the year portfolio will be given as a guarantee coverage.
Promotion of Digital Transactions:
With the help of a cashback facility, this scheme helps to promote Digital Transactions. At the same time, this facility spread awareness to the core of the masses and be beneficial to them. Another huge benefit of vendors for using digital transactions as a method of payment is building a credit score with each usage.
This scheme deals with people who usually are not as conscious of the advantages of credit scores. Eventually, when they take loans, it turns out to be not very cost-efficient. This method not just educates individuals about the system but also helps to build the system as individuals use it.
A list of the commonly selected digital payment aggregators and lending institutions-
- NPCI (BHIM)
Aside from the scheme the payment aggregators also provide cashback based on the following terms-
- Each payment to be eligible needs to be of and above Rs. 25
- On making 50 eligible digital transactions in a month the cashback amount will be Rs. 50
- On making the next 50 such transactions in the same month (i.e., 100) the cashback amount will be Rs. 75
- On making the next 100 transactions in the same month (i.e., 200) the cashback amount will be Rs. 100.
How To Apply PM SVANidhi Scheme:
-To apply for loans under SVANidhi Scheme, all the eligible street vendors need to contact a Banking Correspondent or any Agent of MFIs of their areas.
-Common Service Centre (CSC) is built up that helps the vendors all throughout the application process.
-The ULBs have a list of all the identified street vendors and this personnel will guide the registered/ identified vendors in accordance with the lists through the application process.
-There are two ways for applying, one through the mobile app and another through the portal.
-It is important to check and verify the rate of eligibility before approaching any facilities to avoid crowds during the pandemic.
Whom to contact:
You can contact your nearest Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Bank, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and SHG Banks.