PM Svanidhi: Micro-Credit Facility Scheme

On 1^st June, 2020, the Ministry of Housing and Urban Affairs has launched a Special Micro-Credit Facility Scheme - PM SVANidhi (PM स्वनिधि ) - PM Street Vendor's AtmaNirbharNidhi, for providing affordable loans to street vendors.
Earlier, the Scheme was announced as a part of the Economic Stimulus-II under the Atmanirbhar Bharat Abhiyan.

It is aimed at enabling the street vendors to resume their livelihoods that have been adversely affected due to COVID-19 lockdown.

The lockdown has affected the lives and livelihoods of many especially daily wagers including street vendors who businesses were affected due to the restrictions.
They usually work with a small capital base taken on very high interest rates from informal sources.
Further, they might have consumed their savings and high cost capital during the lockdown.
In such a time, there is an urgent need to provide affordable credit to them to ensure their business gets a boost.

Applicability

The scheme would benefit vendors, hawkers and people involved in goods and services related to textiles, apparel, artisan products, barbers shops, laundry services etc. in different areas.
The scheme is valid until March 2022.

Loan Facility

The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments within a year. The loans would be without collateral.
There will be no penalty on early repayment of loan.

Interest Subsidy

On timely/ early repayment of the loan, an interest subsidy @ 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis.

Role of Urban Bodies

SIDBI to be Technical Partner

Small Industries Development Bank of India(SIDBI) is the technical partner for implementation of this scheme.
It will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises.

Harnessing Technology for Empowerment

In line with the Government’s vision of leveraging technology to ensure effective delivery and transparency, a digital platform with web portal/ mobile app is being developed to administer the scheme with end-to-end solution.
The IT platform will also help in integrating the vendors into the formal financial system.
This platform will integrate the web portal/ mobile app with UdyamiMitra portal of SIDBI for credit management and PAiSA portal of MoHUA to administer interest subsidy automatically.

Encouraging Digital Transactions

The scheme incentivises digital transactions by the street vendors through monthly cash back.

Focus on Capacity Building

Government in collaboration with State Governments, State Missions of DAY-NULM, ULBs, SIDBI, CGTMSE, NPCI and Digital Payment Aggregators will also launch a capacity building and financial literacy programme of all the stakeholders and IEC activities throughout the country.

This is for the first time in India’s history that street vendors from peri- urban/ rural areas have become beneficiaries of an urban livelihood programme.
It is for the first time that Microfinance Institutions, Non-Banking Financial Company, Self Help Groups have been allowed in a scheme for the urban poor due to their ground level presence and proximity to the urban poor including the street vendors.

This scheme will go a long way in enabling them to resume work and earn livelihoods.
Over 50 lakh people, including vendors, hawkers, thelewalas, rehriwala, etc. in different areas/ contexts are likely to benefit from this scheme.
The scheme provides for escalation of the credit limit on timely/ early repayment of loan to help the vendor achieve his ambition of going up on the economic ladder.