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PM SVANidhi: Giving Resolute Support to Indian Street Vendors

PM SVANidhi scheme

Directly touching the lives of common people and improving them has been the hallmark of PM Modi’s government over the past six years. In the same spirit, PM SVANidhi scheme launched helps street vendors economically affected due to COVID pandemic by lending working capital loans of upto ₹10,000.

This scheme has begun to help a large portion of street vendors primarily belonging to informal sector of the economy to tide over the economic crunch. Till now 7.17 lakh street vendors have applied for working capital loans under the scheme.

Working of the Scheme

The scheme targets to benefit over 50 lakh street vendors, who had been vending on or before 24th March this year, in urban areas. The duration of the scheme is till March 2022. The street vendors belonging to the surrounding peri-urban or rural areas are being included as beneficiaries under the urban livelihoods programme for the first time.

The vendors can avail a working capital loan of upto ₹10,000, which is repayable in monthly instalments over a tenure of one year. On timely and early repayment of the loan, an interest subsidy at the rate of seven per cent per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on half-yearly basis.

Easing the Application Process

The Union Government recognized that this scheme is primarily meant for informal sector workers who might not necessarily have financial documents to present so as to avail benefit from the scheme.

Keeping this in mind, a letter of recommendation module was launched to help them avail working capital loans easily. Street vendors, who don’t have identity cards, certificate of vending or are not in the surveyed list for availing benefits can now request for a Letter of Recommendation (LoR) with an urban local body and using this LoR can get the working capital loans.

If the vendor does not have one of the following documents:

  • Proof of availing one-time assistance provided by certain states during the period of lockdown,
  • Membership details with the vendors’ associations
  • Any other documents to prove that he is a vendor

Then the vendor can request ULB (urban local body) through a simple application on white paper to conduct local enquiry to ascertain the genuineness of the claim as vendor. ULBs will have to dispose of the request for issue of LoR within a period of 15 days.

It stated that the vendors possessing LoR will be issued certificate of vending or identity card within a period of 30 days, adding that this provision will help in extending reach of the scheme to the maximum number of beneficiaries.

Progress of the Scheme

Online dashboard of the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme was launched by Secretary of Housing and Urban Affairs Durga Shanker Mishra. The online dashboard is dynamic, interactive and would provide a one stop solution to all stakeholders looking for information and tracking monitoring of progress of PM SVANidhi up to city level.

Since the launch of the scheme on 2nd of July, 7.73 Lakh applications have been received and out of this 1.93 lakh applications worth ₹190 crores have already been sanctioned in different States and UTs as of 30th of August.

Some interesting insights gleaned from the dashboard:

  • Average time taken to sanction loan under PM-Svanidhi is just 9 days
  • Average age of applicants is 39 years, indicating how this scheme is helping the micro-entrepreneurs who have just started out
  • Madhya Pradesh and Telangana are the 2 top states where the most number of applications have been received- 2.34 lakh and 1.53 lakh applications respectively
  • 45% of the applicants are fruits and vegetable sellers, showing that the most vulnerable of street vendors are utilizing the scheme to help them get back on their feet

Image: Dashboard as of 30th August, 2020

Pertinent to note here is that the onboarding of the vendors on digital payment platforms is a very important component to build the credit profile of the vendors and help them become part of the formal urban economy.

National Hawkers Federation, body representing street vendors of India said that PM Svanidhi goes a long way in reducing their dependence on money lenders, who charge exorbitant interest rates, sometimes from 100 to 300%.

They have also set up a dedicated team of business correspondents in association with banks to ensure “not a single loan account turns into NPA.