Loan scheme for Street Vendor’s? What is PM SVANidhi (स्वनिधि) Loan Scheme and How to Apply?

Introduction

In India Street vendors represent a very important role to the constitution of the informal economy and play a significant role in ensuring the availability of the goods and services at affordable rates at the door-step of the city dwellers.

We are just talking about small vendors, hawkers, thelewala, rehriwala, theliphadwala etc. in different areas/ contexts. The goods supplied by them include vegetables, fruits, ready-to-eat street food, tea, pakodas, breads, eggs, textiles, apparel, footwear, artisan products, Handicraft goods, cloths, Toy, books/ stationery etc. Many of them are service providers include barbershops, Electricians, carpenters, cobblers, pan shops, Tea shops, laundry services, etc.

The COVID-19 pandemic and consequent lockdowns have adversely impacted the livelihoods of street vendors. They usually work with a small capital base and might have consumed the same during the lockdown. Therefore, there is an urgent need to provide credit for working capital to street vendors to resume their business.

What is PM SVANidhi (स्वनिधि) Loan Scheme?

PM SVANidhi stands to PM Street Vendor’s AtmaNirbhar Nidhi Scheme. A special Micro Credit Facility for Street Vendors. Under this scheme, Urban street vendors will be eligible to avail a Working Capital (WC) loan of up to 10,000/- with tenure of 1 year and repaid in monthly installments. For this loan, no collateral will be taken by the lending institutions. for the benefits of vendor’s if vendors pay the Loan On timely or early then the vendors will be eligible for the next cycle of the working capital loan with an enhanced limit. No prepayment penalty will be charged from the vendors for repayment before the scheduled date.

Who is Eligible for PM SVANidhi (स्वनिधि) Loan Scheme?

The PM SVANidhi Scheme is available to all street vendors engaged in vending in urban areas as on or before March 24, 2020. The eligible vendors will be identified as per the following criteria:

• Street vendors in possession of Certificate of Vending / Identity Card issued by Urban Local Bodies (ULBs);
• The vendors, who have been identified in the survey but have not been issued Certificate of Vending / Identity Card; Provisional Certificate of Vending would be generated for such vendors through an IT-based Platform.

What is the Rate of Interest?

In the case of Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks & SHG Banks, the rates will be as per their prevailing rates of interest. In the case of NBFC, NBFC-MFIs, etc., interest rates will be as per RBI guidelines for the respective lender category.

Special Benefits of Scheme?

(1.) Interest Subsidy @ 7%

The vendors, availing loan under this 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 as on June 30, September 30, December 31 and March 31 during each financial year. Subsidy will only be considered in respect of accounts of borrowers, which are Standard (non-NPA as per extant RBI guidelines) on respective claim dates and only for those months during which the account has remained Standard in the concerned quarter. The interest subsidy is available up to March 31, 2022. The subsidy will be available on first and subsequent enhanced loans up to that date. In case of early payment, the admissible amount of subsidy will be credited in one go.

(2.) Cash Back Facility

The network of lending institutions and digital payment aggregators like NPCI (for BHIM), PayTM, GooglePay, BharatPay, AmazonPay, PhonePe etc. will be used to onboard the street vendors for digital transactions. The onboarded vendors would be incentivized with a monthly cashback in the range of Rs. 50 - Rs. 100 as per the following criteria:

1. On executing 50 eligible transactions in a month: Rs. 50;
2. On executing the next 50 additional eligible transactions in a month: Rs. 25 (i.e on reaching 100 eligible transactions, the vendor to receive Rs. 75); and
3. On executing the next additional 100 or more eligible transactions: Rs. 25 (i.e on reaching 200 eligible transactions, the vendor to receive Rs. 100).

How to Apply for PM SVANidhi (स्वनिधि) Loan Scheme?

• Step-1: Open http://pmsvanidhi.mohua.gov.in/
• Step- 2: Enter the Mobile number of Street vendors. Select the checkbox of ‘I am not a robot’ and click on ‘Request OTP’ button.
• Step-3: Enter 6 digits OTP received on Street vendor mobile number and click on the ‘Verify OTP’ button. Upon verification of OTP, the user will be successfully onboarded.
• Step–4: Select the Category of Street Vendor.
• Step- 5: If street vendor selects category as A, then SRN no. will be asked. If SRN is not known, click on the link of ‘Don’t have SRN? Find here’. A link for searching SRN will open in a new tab.
• Step-6: To find SRN, choose State, enter the mobile number of a street vendor, and click on the ‘Search’ button. (Mobile number should be the as per the data sent to GoI)
• Step –7: “SRN” number with green color will be displayed. Copy the SRN Number.
• Step –8: In the previous tab enter “SRN” number and click on ‘Search’ button
• Step – 9: SRN number along with Street Vendor details will be displayed. Confirm the SRN number by selecting the checkbox.
• Step – 10: Upload either ID card or Certificate of Vending or both. After clicking on the ‘Next’ button, user will proceed to Loan application form.

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