The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) is a unique scheme launched by the Government of India in June 2020. This scheme is part of the broader Atmanirbhar Bharat Abhiyan (Self-Reliant India Movement) and aims to support street vendors who were adversely impacted by the COVID-19 pandemic.
PM SVANidhi provides street vendors with affordable loans to help them resume their livelihoods, increase income, and work towards financial inclusion.
What is the PM SVANidhi Scheme?
The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme provides micro-credit to street vendors, enabling them to rebuild their businesses and enhance their incomes. Under this scheme, street vendors are eligible to apply for a working capital loan of up to ₹10,000 for a one-year tenure. Upon successful repayment, vendors are eligible for a higher loan amount, up to ₹20,000 and then ₹50,000 for subsequent loans.
In addition to financial support, PM SVANidhi also encourages digital transactions and rewards vendors who use digital payments. This scheme is a step towards achieving the government’s goal of financial inclusion, empowering small vendors to become self-sufficient, and creating a cashless economy.
Benefits of the PM SVANidhi Scheme
1. Affordable Loans
The PM SVANidhi scheme offers working capital loans of up to ₹10,000 with minimal interest rates and no collateral, making it accessible to even the smallest vendors. This affordable financing helps vendors re-establish their businesses and maintain a steady income stream.
2. Opportunity for Increased Loan Amount
Street vendors who repay their initial loan on time are eligible for an enhanced loan of up to ₹20,000, and subsequently ₹50,000. This feature incentivizes timely repayment and provides vendors with a pathway to expand their business.
3. Interest Subsidy on Timely Repayment
An interest subsidy of 7% per annum is provided to vendors who make timely repayments. This subsidy amount is credited directly to the vendor’s bank account every quarter, reducing the effective interest burden.
4. Digital Transaction Rewards
The PM SVANidhi scheme promotes digital payments by offering cashback incentives of up to ₹100 per month to vendors who conduct transactions through digital platforms. This not only encourages digital literacy but also helps vendors gain a digital footprint.
5. Financial Inclusion and Social Security
By integrating street vendors into the formal financial system, the PM SVANidhi scheme promotes financial inclusion. Vendors who use digital transactions are likely to improve their credit scores, making it easier for them to avail other formal credit facilities in the future.
Advantages of the PM SVANidhi Scheme
1. Empowering Street Vendors
The PM SVANidhi scheme is designed specifically for street vendors, acknowledging their significant role in the informal economy. The scheme gives them a chance to become financially self-sufficient and grow their small businesses.
2. Boosts Economic Activity
By providing street vendors with accessible loans, the PM SVANidhi scheme helps stimulate economic activity at the grassroots level. Vendors can buy more inventory, serve more customers, and gradually increase their profits, contributing to the overall economy.
3. Promotes Digital Literacy
With its focus on digital transactions, PM SVANidhi promotes digital literacy among street vendors. Learning to use digital payment methods helps vendors cater to a broader range of customers, especially those who prefer cashless transactions.
4. Minimal Documentation Required
The application process for the PM SVANidhi scheme is straightforward, with minimal documentation. Vendors can apply online, making it easy for them to access funds quickly without the hassle of complex paperwork.
5. Social Security Benefits
By integrating street vendors into the formal economy, PM SVANidhi indirectly links them to social security benefits and other government schemes. Vendors with formal bank accounts may be eligible for programs like Pradhan Mantri Jan Dhan Yojana and Atal Pension Yojana, improving their financial security.
Disadvantages of the PM SVANidhi Scheme
1. Limited Loan Amount
While the PM SVANidhi scheme provides vendors with an initial loan of ₹10,000, the amount may not be sufficient for some vendors with larger inventory needs. Though subsequent loans allow for increased amounts, the initial funding may be limited.
2. Digital Literacy Challenges
Though the scheme promotes digital transactions, not all street vendors are familiar with digital payment systems. Vendors with limited access to smartphones or digital literacy may find it challenging to fully benefit from the cashback incentives.
3. Low Awareness Among Target Group
Despite the benefits, awareness of the PM SVANidhi scheme is relatively low in some areas. Many vendors are either unaware of the scheme or uncertain about how to apply, limiting the scheme’s outreach and impact.
4. Risk of Default
Due to the nature of informal work, some vendors may face challenges in repaying the loan, leading to a risk of default. If vendors are unable to repay on time, they may lose access to subsequent, larger loans and the associated benefits.
How to Apply for the PM SVANidhi Scheme
Applying for the PM SVANidhi scheme is simple and can be done online. Here is a step-by-step guide to help street vendors apply:
Step 1: Visit the PM SVANidhi Portal
Start by visiting the official PM SVANidhi website, where you can access information about the scheme and initiate your application.
Step 2: Check Eligibility
Ensure you meet the eligibility criteria for the PM SVANidhi scheme. This scheme is open to street vendors who are engaged in vending activities on or before March 24, 2020.
Step 3: Register on the Portal
If you meet the eligibility requirements, create an account on the portal. You will need to provide basic information, including your name, contact details, and Aadhaar number.
Step 4: Fill Out the Application Form
After registering, complete the online application form by providing details about your business, location, and bank account. You may also need to upload your Street Vendor certificate or ID card, if available.
Step 5: Submit Required Documents
You will be required to upload certain documents to verify your identity and business activity. These documents may include an Aadhaar card, voter ID, or any other government-issued ID. Some states may also require a letter of recommendation from the local urban body.
Step 6: Select Lending Institution
Choose a lending institution, such as a bank or financial institution, from the options provided on the portal. These institutions will be responsible for disbursing the loan to you.
Step 7: Await Approval and Disbursement
Once your application is submitted and verified, it will be reviewed by the selected lending institution. Upon approval, the loan amount will be credited directly to your bank account.
Step 8: Start Repayment and Use Digital Payments
After receiving the loan, you can use it to support your business activities. Make sure to make repayments on time to benefit from the interest subsidy and become eligible for a higher loan amount in the future.
The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) is a groundbreaking initiative that provides financial support to street vendors across India. By enabling easy access to working capital loans, the scheme empowers vendors to rebuild their businesses, increase their earnings, and achieve financial stability. While there are challenges associated with digital literacy and loan amount limitations, the scheme provides a significant opportunity for vendors to become part of the formal economy.
For more information on other similar government programs, explore articles on Atal Pension Yojana (APY), Standup India Plan, and Pradhan Mantri Rozgar Protsahan Yojana (PMRPY).
