The PM SVANidhi Scheme was launched in June 2020 to empower street vendors affected by COVID-19. Read this article to know more about PM SVANidhi Scheme
Introduction
- The PM SVANidhi Scheme was launched in June 2020 to empower street vendors affected by COVID-19.
- It provides a Micro-Credit facility to help vendors recover their losses.
- The scheme operates under the Ministry of Housing and Urban Affairs (MoHUA).
- Key objectives of the scheme include facilitating working capital loans up to ₹ 10,000.
- It incentivises regular loan repayment by offering a 7% per annum interest subsidy, credited quarterly.
- The scheme also rewards digital transactions with monthly cashback offers.
Important Facts about PM SVANidhi for UPSC |
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| Full-Form of PM SVANidhi | Prime Minister Street Vendor’s Atmanirbhar Nidhi |
| Launch Date | 1st June 2020 |
| Under which government ministry? | Ministry of Housing and Urban Affairs (MoHUA) |
| Target Beneficiary |
(Those street vendors as on/before 24th March 2020) |
| Mandatory Documents to Access Benefits |
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| Tenure of the scheme | June 2020 – March 2022 |
| Direct Link to avail the benefits under the PM SVANidhi | https://pmsvanidhi.mohua.gov.in/ |
Objectives of PM SVANidhi
- The PM SVANidhi Scheme’s objectives are to provide vendors with affordable working capital loans, enabling them to restart their livelihoods after the nationwide lockdown caused by the pandemic.
- To encourage timely loan repayments, incentives such as cash-back rewards and higher loan amounts on subsequent requests are offered.
- Furthermore, the scheme promotes digitalisation by rewarding vendors who choose to make loan repayments digitally.
Salient Features of PM SVANidhi
- This scheme operates at the central level.
- It aims to offer affordable working capital loans to street vendors affected by the COVID-19 pandemic.
- The scheme will remain in effect until March 2022.
- Vendors can receive an initial working capital of up to ₹ 10,000.
- An interest subsidy of 7% is provided to vendors who repay their loans early or on time.
- Monthly cash-back incentives are available for digital payments, ranging from ₹ 50 to ₹ 100.
- If a vendor repays the first loan on time, they have a higher chance of being eligible for a larger loan.
- No collateral security is required for vendors to access the loan.
Benefits Under PM Svanidhi Scheme
The Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme is a micro-credit facility for street vendors. The scheme offers a number of benefits to street vendors, including:
- Working Capital Loan of Up to ₹50,000: Street vendors can avail of a working capital loan of up to ₹50,000, which is repayable in monthly installments over a period of one year.
- Collateral-free Loan: The loan is collateral-free, meaning that street vendors do not need to provide any security to avail of the loan.
- Interest Subsidy: Street vendors are eligible for an interest subsidy of 7% on the loan if they repay it on time.
- Cashback on Digital Transactions: Street vendors who use digital payment methods for their transactions are eligible for a cashback of up to ₹1200 per annum.
- Eligibility for Enhanced Next Tranche of Loans: Street vendors who repay their loans on time and in full are eligible for enhanced loans in the next cycle.
- Handholding Support: The scheme provides handholding support to street vendors to help them start and grow their businesses. This includes training on financial literacy, digital payments, and business management.
- Access to the Formal Financial System: The scheme helps street vendors gain access to the formal financial system, which can help them improve their credit history and avail of other financial products and services in the future.
- Social Security Benefits: The scheme also provides a number of social security benefits to street vendors, such as accidental insurance and health insurance.
PM SVANidhi Scheme Eligibility Criteria
- The scheme is open to beneficiaries in states and union territories that have established rules and guidelines under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014.
- Eligible beneficiaries include street vendors who were actively operating in urban areas on or before March 24, 2020. Their eligibility will be determined based on the following criteria:
- Possession of a Certificate of Vending or Identity Card issued by Urban Local Bodies (ULBs).
- Identification in the survey, even without possessing a Certificate of Vending or Identity Card.
- Possession of a Letter of Recommendation by the Urban Local Body (ULB) or Town Vending Committee (TVC).
Background of the Scheme
- Street vendors have faced negative consequences on their livelihoods due to the COVID-19 pandemic and subsequent lockdowns.
- Typically operating with limited capital, they may have depleted their resources during the lockdown period.
- Therefore, providing credit for working capital to street vendors would aid in resuming their livelihood activities.
Lending Institutions Under PM SVANidhi
- Scheduled Commercial Banks
- Regional Rural Banks
- Cooperative Banks
- Non-Banking Financial Companies
- Micro-Finance Institutions
- Self Help Groups (SHG) Banks
Impact
- With the aim of assisting a vulnerable population affected by movement restrictions, the Scheme has achieved a substantial impact.
- So far, there have been 33.6 lakh loan applications, out of which over 17.3 lakh loans have been approved and more than 12.7 lakh loans disbursed.
- To ensure efficient implementation of the Scheme, a comprehensive capacity building plan was devised, targeting stakeholders and digital payment aggregators.
- Branding and communication initiatives were also undertaken to strengthen the intended impact of the Scheme.
Boost to Digital Infrastructure
- The objective of the PM SVANidhi Scheme was to stimulate economic activities among street vendors, a group heavily impacted by pandemic restrictions.
- By promoting greater formalisation among street vendors, the Scheme aimed to create social and financial opportunities, enabling upward social and economic mobility for them.
Implementation Partner
- The Ministry of Housing and Urban Affairs has appointed the Small Industries Development Bank of India (SIDBI) as the implementation partner for administering the scheme.
- SIDBI will utilise the network of lending institutions such as Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Financial Companies (NBFCs), and Micro-Finance Institutions (MFIs) for implementing the scheme.
FAQs
When was PM street Vendor AtmaNirbhar Nidhi launched?
In June 2020, the SVANidhi Scheme, also known as the PM Street Vendor's Atma Nirbhar Nidhi Scheme, was introduced as a Micro-Credit facility.
In June 2020, the SVANidhi Scheme, also known as the PM Street Vendor's Atma Nirbhar Nidhi Scheme, was introduced as a Micro-Credit facility. Who launched PM SVANidhi scheme?
The implementation and management of the PM SVANidhi Scheme have been entrusted to the Ministry of Housing and Urban Affairs (MoHUA).
What is the aim of PM SVANidhi?
The objective of PM SVANidhi is to empower street vendors and assist them in recovering the losses they suffered due to the COVID-19 pandemic.
What are the disadvantages of PM SVANidhi scheme?
The PM SVANidhi scheme faces several challenges, including uneven distribution, limited coverage, insufficient data, and inadequate representation of minority communities. These issues require urgent attention and resolution.
How many street vendors are provided under PM SVANidhi?
The objective of this scheme is to provide benefits to more than 50 lakh street vendors.
What is the PM SVANidhi scheme?
The PM SVANidhi Scheme is a micro-credit facility for street vendors. It provides street vendors with working capital loans of up to ₹50,000, which are repayable in monthly installments over a period of one year. The loans are collateral-free, and street vendors are eligible for an interest subsidy of 7% on the loan if they repay it on time.
What are the benefits of the PM SVANidhi scheme?
The benefits of the PM SVANidhi scheme include:
● Working capital loan of up to ₹50,000
● Collateral-free loan
● Interest subsidy of 7%
● Cashback on digital transactions
● Eligibility for enhanced next tranche of loans
● Handholding support
● Access to formal financial system
● Social security benefits
Who is eligible for the PM SVANidhi scheme?
To be eligible for the PM SVANidhi scheme, street vendors must meet the following criteria:
● They must be vending in urban areas on or before 24 March, 2020.
● They must have a certificate of vending from the Urban Local Body (ULB).
● They must not have availed of any other loan under the scheme earlier.
Is the PM SVANidhi loan interest-free?
No, the PM SVANidhi loan is not interest-free. However, street vendors are eligible for an interest subsidy of 7% on the loan if they repay it on time.
What is the 10000 rs loan by the Government?
The 10000 rs loan by the Government is a working capital loan of ₹10,000 that street vendors could avail of under the PM SVANidhi scheme earlier. However, the maximum loan amount under the scheme has now been increased to ₹50,000.
What is the 50000 loan from the Government?
The 50000 loan from the Government is the maximum loan amount that street vendors can now avail of under the PM SVANidhi scheme.
What is the budget of the PM SVANidhi scheme?
The budget of the PM SVANidhi scheme is ₹5,000 crore.
What is a loan subsidy scheme?
A loan subsidy scheme is a scheme where the Government provides a subsidy on the interest of loans taken by borrowers. This helps to reduce the cost of borrowing for borrowers and makes it easier for them to repay their loans.
When did the PM SVANidhi Yojana start?
The PM, SVANidhi Yojana, started on June 1, 2020.
What is the duration of the PM SVANidhi loan?
The duration of the PM SVANidhi loan is one year.
What is an interest subsidy?
An interest subsidy is a subsidy that the Government provides on the interest of loans taken by borrowers. This helps to reduce the cost of borrowing for borrowers and makes it easier for them to repay their loans.
WHO launched the SVANidhi Samriddhi?
The SVANidhi Samriddhi was launched by the Ministry of Housing and Urban Affairs on April 1, 2022. It is a sub-scheme of the PM SVANidhi Yojana that aims to provide social security benefits to street vendors.
Who is eligible for the PM SVANidhi loan 50 000?
All street vendors who meet the eligibility criteria for the PM SVANidhi scheme are eligible for the PM SVANidhi loan of ₹50,000.
What is the period for which subsidy is available?
The subsidy is available for the entire loan duration, i.e., one year.
How much do you pay for EMI?
The EMI amount for the PM SVANidhi loan will vary depending on the loan amount and the interest rate. However, the EMI amount will be affordable for street vendors, as the Government provides an interest subsidy of 7% on the loan.
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