PM SVANidhi Yojana: Do you need funding to start a business? Get Rs 50,000 collateral-free loan through this govt scheme

PM SVANidhi Yojana: The government introduced the PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) plan in June 2020 to give street sellers financing for operating capital. Under this programme, street sellers can obtain collateral-free loans at low interest rates for a year.
 
The scheme was started due to the COVID-19 pandemic, which made life difficult, especially for small businessmen. Street merchants typically have a modest capital base. Their money and wealth would have been depleted during the country's lockdown. As a result, the Modi government started the SVANidhi Yojana, an urgent need developed to supply vendors with financing for operating capital so that they could restart their operation. 

PM SVANidhi Yojana: What is the eligibility for PM SVANidhi Yojana loan?

The PM SVANidhi scheme is open to all street vendors working in metropolitan areas on or before March 24, 2020.

Following are a few criteria that will be required to avail the benefit of this loan: 

• Street sellers must have an identity card or the Certificate of Vending provided by urban local bodies (ULBs).Street sellers who were recognised in the survey but have not received a Certificate of Vending or the identity card will be provided with a Provisional Certificate of Vending.
• Street vendors who were not included in the ULB-led identification survey or who began selling after the survey was completed but received a Letter of Recommendation (LoR) from the ULB or Town Selling Committee. 
• Street vendors in the surrounding development or rural or peri-urban regions who sell inside the geographical boundaries of the ULB and have been given a Letter of Recommendation (LoR) by the ULB or Town Vending Committee (TVC).

PM SVANidhi Yojana: How much loan you can borrow?

A vendor can avail a collateral-free loan up to Rs 50,000. The recipients can get Rs 10,000 as the first tranche, and following successful repayment, they will be eligible for a loan of Rs 20,000 and a third tranche of Rs 50,000 upon payback of the second loan.

PM SVANidhi Yojana: Benefits

1. Interest
Small Finance Banks (SFBs), Scheduled Commercial Banks, Regional Rural Banks (RRBs), Cooperative Banks, and SHG (self-help groups) Banks: Interest will be as per their prevailing rates of interest. 
Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs), Non-Banking Financial Company (NBFC), etc: Interest rates will be as per the RBI guidelines.
MFIs (non-NBFC) and other lender categories: Interest rates would be applicable as per the extent of RBI guidelines for NBFC-MFIs. 
 
2. Cashback
Digital payments companies like Paytm, NPCI (for BHIM), GooglePay, AmazonPay, BharatPay, and PhonePe, among others, assist sellers in becoming digitally enabled. Onboarded sellers earn incentives in the form of a monthly payback ranging from Rs 50 to Rs 100.
 
3. Collateral
No collateral is required to avail this loan.
 
4. Interest subsidy
The plan provides a 7 per cent interest subsidy to encourage regular repayments.

PM SVANidhi Yojana: How to apply?

Street sellers should approach a Banking Correspondent (BC) or an agent of a Micro Finance Institution (MFI) in their region. ULBs will have a list of these individuals. They will assist street sellers in filling out the application form and uploading the papers to a mobile app or the appropriate site. 

KYC documents needed to apply for working capital loan are:

Any of these: Aadhaar card/Voter Identity card/Driving license/MGNREGA card/PAN card.
Certificate of Vending or ID card issued by ULBs/letter of recommendation from ULB or TVC.

A recent update on PM SVANidhi​ scheme loans

Last Friday, February 16, 2024, Minister of Housing & Urban Affairs Hardeep Singh Puri said that the number of bank loans offered to street vendors in Delhi via the PM SVANidhi initiative has surpassed 2 lakh, with over Rs 221 crore issued to them.
 
“As of 14 February 2024, we have received 3.05 lakh loan applications from street vendors of Delhi, of which 2.2 lakh applications have been sanctioned by banks and 1.9 lakh loans already disbursed worth Rs 221 crores. With the disbursement of 10,000 loans today, the milestone of 2 lakh loan disbursements in Delhi will be crossed,” the minister said while speaking at the PM SVANidhi mega camp.
 
He stated that the scheme had extended more than 80.42 lakh loans to 60.94 lakh street vendors totaling Rs 10,678 crores by facilitating a collateral-free first working capital loan of Rs 10,000 in the first tranche, followed by Rs 20,000 and Rs 50,000 in the second and third tranches, respectively.