Introduction
PM SVANidhi (AtmaNirbhar Nidhi) was launched on June 1, 2020, during the COVID-19 pandemic. The micro-credit scheme launched by the Ministry of Housing & Urban Affairs introduced the PM Street Vendor's AtmaNirbhar Nidhi scheme to empower street vendors. It offers collateral-free working capital loans of up to Rs. 10,000 (US$ 119.80) with a one-year tenure to around 50 lakh street vendors. The scheme's objective is to support these vendors in restarting their businesses in urban areas as well as peri-urban and rural regions, promoting their full development and economic upliftment.
The scheme operates a complete IT platform from start to end, featuring Aadhaar-based e-KYC authentication and SMS notifications to keep applicants informed about their application status.
The scheme provides loans in three tranches: First tranche of Rs. 10,000 (US$ 119.80), second tranche of Rs. 20,000 (US$ 239.61) subject to repayment of the first tranche, and third tranche of Rs. 50,000 (US$ 599.03) upon settlement of the second loan.
As per the website of the PM SVANidhi scheme, as of May 3, 2024, 66.75 lakh loans have been sanctioned as first tranche, 18.77 lakh as second tranche and 3.08 lakh as third tranche.
Need for PM SVANidhi scheme
- The PM SVANidhi scheme was launched with a vision of encouraging a particularly at-risk population due to the lack of availability of funds and providing vendors with access to affordable working capital loans; as a result, the scheme has led to a significant impact.
- The SVANidhi scheme plans to support street vendors by making their businesses more official. This was to give them more and better chances for achievement, both within society and economically, and to help them progress in society.
- The PM SVANidhi scheme encourages digitalisation by incentivising vendors who choose digital repayment methods for their loans. It offers incentives in various ways such as:
- On regular repayment of debt, interest subsidy of 7% per annum is offered.
- Vendor is eligible for a cashback of up to Rs. 1,200 (US$ 14.38) per annum on undertaking specified digital transactions.
Policy details
- As per a report by SBI, 68% of vendors who paid their first loan instalment of Rs. 10,000 (US$ 119.80) proceeded to apply for the second loan of Rs. 20,000 (US$ 239.61). Similarly, 75% of vendors who repaid the second loan, applied for the third loan of Rs. 50,000 (US$ 599.03). This indicates that small street vendors are handling their funds well. So far, banks have given out loans totalling Rs. 9,152 crore (US$ 1.10 billion) under this scheme.
- It is noteworthy to mention that public sector banks (PSUs) have played a crucial role in this achievement by financing the first-ever micro-credit scheme made for the urban poor. Among the top five banks that have disbursed loans include SBI with a total of 31%, Bank of Baroda 11%, Union Bank of India 10%, Punjab National Bank 8%, and Canara Bank 7%.
- At the launch of the PM SVANidhi scheme, the government aimed to provide 50 lakh street vendors with the first loan of Rs. 10,000 (US$ 119.80). However, due to so many vendors applying for loans and the high success of the scheme (106% of the original target), it has revised the target to 63 lakh street vendors, and currently, it has disbursed loans to 63,88,998 vendors.
- PM SVANidhi has emerged as a great way to bring numerous parts of society together. It is improving urban micro-entrepreneurs who were not formalised before. About 75% of the vendors getting loans are not from the general category.Among the beneficiaries, 44% of vendors are from the OBC category, while 22% are from the SC and ST categories.
- Out of the total beneficiaries, 44% are female and 56% are male, which shows the empowerment of entrepreneurial capabilities of women in urban areas, making SVANidhi a gender-neutral scheme.
Eligibility criteria of PM SVANidhi scheme
- Street vendors having an identity card or certificate of vending that is usually issued by the Urban Local Bodies (ULBs).
- Street vendors who are located during the survey but have not been issued a certificate of vending or identity card will get a provisional certificate of vending through a platform based on IT.
- Street vendors with a Letter of Recommendation (LoR) from the Town Vending Committee (TVC) or ULB that was not included in the identification survey conducted by the latter.
- Street vendors from nearby rural, peri-urban or developing areas vending within ULB geographical limits, provided they hold an LoR issued by the ULB or TVC.
- The required documents to apply for the scheme are Aadhar card, voter ID, utility bill, vendor licensing or registration documents.
Process to apply for PM SVANidhi scheme
In order to submit a loan application under the PM SVANidhi scheme, applicants must take the following three basic steps:
- Understanding the requirement for loan application
To fill in the Loan Application Form (LAF), one needs to properly understand the information documents required. It is vital to keep all the documents ready before starting the application process. - Linking mobile number to Aadhar card
It is important to link the applicant’s mobile number to their Aadhar card. This is needed for KYC/Aadhar validation during the online application process. It will also help to get the LoR from ULB (if required). This also further aids in availing of future benefits of various government schemes. - Verifying eligibility as per the scheme's rules
Any vendor would be falling in any of the following four categories:- The vendor was included in the ULB survey, and the TVC/ULB have given them an identity card or a certificate of vending.
- The vendor is listed in the ULB survey, but neither the TVC nor the ULB have given them an identity card or a certificate of vending.
- Street vendors who either began selling after the survey was finished or were not included in the ULB identification survey. There are two classifications for this qualification:
C1: LoR has been issued to the vendor by ULB/TVC.
C2: No LoR has been issued to the vendor. - Street vendors operating within the boundaries of the ULBs' two sub-categories in the surrounding development, peri-urban and rural areas:
D1: The vendor has received an LoR from TVC or ULB.
D2: The vendor has not received an LoR.
Upon following these steps, one can begin the application process on the portal. They can directly apply themself and through a Common Service Centre (CSC) near their locality.
Loan disbursement statistics
The government has revealed in Rajya Sabha that the micro-credit programme (PM SVANidhi scheme) has successfully distributed a substantial sum of Rs. 9,790 crore (US$ 1.17 billion) in loans to recipients.
|
Fiscal Year |
Loan Disbursement (in US$ million) |
|
2020-21 |
244.16 |
|
2021-22 |
149.44 |
|
2022-23 |
233.45 |
|
2023-24 (Till Dec 5) |
555.26 |
Conclusion
The PM SVANidhi scheme serves as an opportunity for entrepreneurship and economic encouragement, specifically during the difficult times of the COVID-19 pandemic. By granting collateral-free loans to street vendors, the scheme has not only promoted financial independence but also gender equality among them. Additionally, the scheme's ability to link unbanked individuals with loans and encourage digital transactions shows a marked behavioural shift towards financial inclusion and digital acceptance in the country. As the scheme continues to benefit millions of street vendors across urban India, it shows empowerment, aiding in the country's socio-economic growth.
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