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PM SVANIDHI Scheme launched by govt to provide affordable loans to street vendors

PM SVANIDHI scheme launched by the central government aims at enabling the street vendors to resume their livelihood which has been adversely affected due to the ongoing COVID-19 pandemic and the subsequent lockdown by the government.

Jun 2, 2020 14:28 IST
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The central government launched PM SVANIDHI- Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi- scheme on June 1. This special micro-credit facility scheme will provide affordable loans to street vendors.

The scheme was launched by the Housing and Urban Affairs Ministry in pursuance of the announcement made by Finance Minister Nirmala Sitharaman in May 2020. Through this scheme, the government will recognize the significant role of the street vendors at making goods and services available at the doorstep.

The launched scheme will benefit over 50 lakh vendors who have been vending on or before March 24, 2020, in urban areas. The duration of the scheme will be until March 2022.

Objective of PM SVANIDHI Scheme:

PM SVANIDHI scheme launched by the central government aims at enabling the street vendors to resume their livelihood which has been adversely affected due to the ongoing COVID-19 pandemic and the subsequent lockdown by the government.

Key Highlights:

The vendors will be able to avail of a working capital loan of up to Rs. 10,000, which will be repayable in monthly installments in the tenure of one year.

On early or timely repayment of the loan, an interest subsidy at the rate of 7% per annum will be credited to the beneficiary's bank account through Direct Benefit Transfer (DBT) on six -month basis.

The Ministry also informed that if the beneficiaries repay the installments earlier or on time, they will develop the credible score that will make him eligible for the higher amount of term loan to Rs. 20,000 or so on.

Role of Urban Local Bodies in the implementation of the scheme:

Urban local bodies will be playing a pivotal role in the implementation of the scheme as the lending institutions under the scheme include, Regional Rural Banks, Scheduled Commercial Banks, Cooperative Banks, Small Finance Banks, Micro Finance Institutions, NBFCs, and Self-Help Groups.

It is the first time that NBFCs/MFIs/SHG Banks have been allowed in a scheme for urban poor. The change is because of their ground-level presence and proximity to the urban poor including the street vendors.

Also, for the fast implementation of the scheme for transparency, a digital platform with a mobile app and web portal has also been developed to administer the scheme with end to end solutions. This platform will also help in integrating the vendors in a formal financial system.

The scheme will also incentivise digital transactions by the street vendors through monthly cashback.

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