PM SVANidhi Scheme: Collateral-Free Loans For Making Street Vendors AatmaNirbhar

By: Tavaga Research

Prime Minister Narendra Modi, today, communicated with the beneficiaries of the PM SVANidhi (Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi) Scheme and distributed loans to 300,000 street vendors.

PM Modi interacting with a street vendor from Uttar Pradesh

The scheme was launched by the Ministry of Housing and Urban Affairs on 1^st June 2020 as a part of the various relief packages announced by the finance minister.

What is PM SVANidhi Yojana?

Street vendors are an integral part of India’s urban informal economy and they play a significant role in making sure the accessibility of various goods and services. 

PM SVANidhi Yojana (Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi) is a special micro-credit facility for street vendors who were affected due to the Covid-19 pandemic. The scheme was launched to provide collateral-free loans of up to Rs 10,000 of 1-Year tenure to approximately 50 lakh street vendors across the country.

The scheme came into force as the government felt that the pandemic and subsequent lockdowns have damaged the livelihood of the daily-bread earners and there was an urgent need of furnishing credit for their working capital requirements.

The tenure of the PM SVANidhi Scheme is up to March 2022.

Features of the PM SVANidhi scheme

• Collateral-free loans of up to Rs. 10,000
• Interest subsidy at 7% on regular and timely repayment of the loan
• Borrowers will be awarded monthly cashback if loans repaid via digital modes of payment
• Eligibility for higher credit on timely repayment of the first loan

Objectives of the scheme:

• Facilitating instant and easy credit
• To incentivize timely repayment of loans
• Rewarding digital modes of payment

Key Takeaway – Cashback and Interest Subsidy

On a working capital loan of Rs 10,000, the borrower of this credit facility gets a maximum cashback of Rs 1,600 which is higher than the total interest payments over the 12-months period.

Illustration of the cash-back and interest subsidy for a loan amounting to Rs. 10,000

Which financial institutions are authorized to lend?

• Regional Rural Banks (RRBs)
• Small Finance Banks (SFBs)
• Cooperative Banks
• Scheduled Commercial Banks
• Non-Banking Financial Companies (NBFCs)
• Micro Finance Institutions (MFIs)
• Established Self Help Groups (SHGs)

How to apply for the PM SVANidhi Yojana?

Before starting the online application process to avail the loan make sure you have all the documents handy as mentioned in this form.

• Visit the official website https://www.pmsvanidhi.mohua.gov.in/ for availing credit
• Log in with the mobile number on the portal
• Fill the application form
• Upload necessary documents
• Submit application

What are the documents required for availing the credit facility under the PM SVANidhi scheme?

• PAN Card
• Aadhar Card
• Driving License
• MNREGA Card
• Identity Card/Vending Certificate
• Voter’s Identity Card

The government’s aim to provide easy credit to the adversely impacted category of the society is a step in the right direction as it bodes well with the informal society to resume their businesses at the earliest.

Tavaga is everything you need to start saving for your goals, stay on track, and achieve them in time. 

Download Now: