What is the PM SVANidhi scheme?

0
626

Under the Pradhan Mantri Street Vendors Atmanirbhar Nidhi (PM SVANidhi) scheme, the central government is extending Rs 10,000 loan as working capital to street vendors to restart their businesses which have been hit by the Covid-19 pandemic. The scheme has proven successful as so far 25 lakh street vendors have come forward seeking the loan.

The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, which was launched in June, 2020 amid the pandemic, is a micro-credit facility that provides street vendors a collateral-free loan of Rs 10,000 with low rates of interest for a period of one year.

 

About the scheme-

  • Launched by Ministry of Housing & Urban Affairs.
  • The scheme intends to facilitate collateral free working capital loans of up to INR 10,000/- of one-year tenure, to approximately 50 lakh street vendors, to help resume their businesses in the urban areas, including surrounding peri-urban/rural areas.
  • Other incentives include- interest subsidy @ 7% per annum on regular repayment of loan.
  • Cashback upto INR 1200/- per annum on undertaking prescribed digital transactions.

Close to 2 million applications have been received under this scheme, of which 752191 have been sanctioned, and 218751 loans have already been disbursed. The scheme aims at aiding the vendors at getting back on their feet financially. In the long term, it aims at establishing a credit score for the vendors as well as creating a digital record of their socio-economic status, so that they can avail the Central government schemes later.

 

Eligibility criteria-

  • Applicable to all vendors who have been vending from or before March 24, 2020 and with a certificate of vending.
  • Certificate of vending is provided after a survey has been conducted of all the vendors by Town Vending Committees as per the Street Vendors Act of 2014.
  • The vendors, who have been identified in the survey but have not been issued Certificate of Vending / Identity Card will also be eligible.
  • Street Vendors, left out of the ULB led identification survey or who have started vending after completion of the survey and have been issued Letter of Recommendation (LoR) to that effect by the ULB/Town Vending Committee (TVC)
  • The vendors of surrounding development/peri-urban/rural areas vending in the geographical limits of the ULBs and have been issued Letter of Recommendation (LoR) to that effect by the ULB/TVC.

 

Challenges-

  • States across the country have unevenly implemented the Street Vendors Act of 2014, which necessitates a survey of the vendors to provide them with a certificate of vending.
  • Delhi has not yet conducted a city-wide survey of vendors as per the rules notified by the Delhi government in 2016, is the lack of a certificate of vending.
  • The vendors must first apply for a Letter of Recommendation (LORs) from the ULBs, which tends to not only delay the entire process, but can also lead to the application being rejected.
  • Some municipalities are also slow in issuing LORs, which has kept hundreds of vendors waiting for the loan for months.
  • Mobile numbers of various vendors were not linked with their Aadhar cards. Many vendor associations are also setting up camps at markets to rectify this issue and also help the vendors in the online application process.
  • Various vendors who have received the loans are often evicted from their place by either the police or by the ULB officials, hitting their only source of income and their ability to repay the loan.

The PM SVANidhi scheme brings in financial mainstreaming of street vendors through loans and digital payments. The government wants to formalise its understanding of street vending, and, based on that understanding, bring it under various schemes.