PM SVANidhi Scheme: Overwhelming response! Modi government's Atma Nirbhar loan project gets thumbs up from street vendors

The Ministry of Housing and Urban Affairs under Modi government is implementing PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme to facilitate collateral free working capital loan to 50 lakh street vendors to restart their businesses post COVID-19 lockdowns. And, the scheme has received an overwhelming response from street vendors.

More than 15 lakh loan applications have been received so far under the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme. Out of these, more than 5.5 lakh loans have been sanctioned and about 2 lakh loans disbursed.  

In order to expedite the loan sanctioning process and provide ease of operation to the lenders, it has been decided to push the applications directly to the bank branches, which have been indicated by the Vendor as ‘Preferred Lender’ OR where the Vendor holds a savings bank account in case ‘Preferred Lender’ is not indicated. This process is expected to give boost to the number of loans sanctioned and cut down the time for loan disbursal drastically.

A software has been developed to facilitate the above mentioned process, which was made operational on September 11, 2020. Approximately 3 lakh applications would be pushed to the banks using this software. Henceforth, the applications would be pushed to the Preferred lenders on a daily basis and for those where no Preferred Lender is indicated, on a weekly basis.

Ministry of Housing & Urban Affairs said, "These measures are expected to accelerate the implementation of PM SVANidhi Scheme by the Lending Institutions in making the street vendors access the benefits of the Scheme and to become Aatma Nirbhar."

The SVANidhi scheme facilitates working capital loan up to Rs 10,000 to street vendors. Under this scheme regular repayment is given special  incentives and digital transactions get rewarded. The Scheme is available to all street vendors from urban areas who were selling products on or before March 24, 2020. The eligible vendors will be identified as per criteria including possession of certificate of vending or Identity Card issued by Urban Local Bodies. Vendors who have left for their native places due to covid 19 lock down will be eligible for the loan on their return.

As per the SVANidhi scheme, urban street vendors will be eligible to avail a working capital loan of up to Rs 10,000 with tenure of one year and to be  repaid in monthly instalments. For this loan, no collateral will be taken by the lending institutions.

On timely or early repayment, the vendors will be eligible for the next cycle of working capital loan with an enhanced limit. No prepayment penalty will be charged from the vendors for repayment before the scheduled date.

The vendors, availing loan under the scheme, are eligible to get an interest subsidy @ 7%. The interest subsidy amount will be credited into the borrower’s account quarterly. Lenders will submit quarterly claims for interest subsidy for quarters ending  on June 30, September 30, December 31 and March 31 during each financial year.

The onboarded vendors would be incentivised with a monthly cashback in the range of Rs 50 - Rs 100 for digital transactions. Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs) & SHG Banks can give credit assistance under this scheme.