Street vendors, like cart and rickshaw pullers, are among the people involved in the unorganized sector jobs. These people often operate in an unprotected environment, selling vegetables, fruits, bread, eggs, textiles, footwear, pan shops, or offering cobbler and barber services. These people often do not have a financial safety net and depend on their daily income for livelihood. The PM SVANidhi Scheme offers protection and safety to them.

The COVID-19 pandemic devastated their income due to social restrictions to curb the disease’s spread. It led to the need for a scheme that provides financial assistance to these small vendors so that they can continue their livelihood.

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What Is the PM SVANidhi Scheme?

It is a centrally initiated scheme funded by the Ministry of Housing and Urban Affairs to provide credit facilities to street vendors and encourage local entrepreneurship.

Eligibility

The scheme is restricted to states and union territories (UT) with notified rules under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, and Meghalaya.
Vendors with licenses from urban local bodies (ULBs), those with a letter of recommendation from any ULB or town vending committee, etc., are eligible. Simply put, all vendors with a license can apply for the scheme.

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How Does The Credit Facility Work?

Urban street sellers can apply for a working capital loan of up to 10,000 for one year with a monthly repayment facility without collateral. The beneficiaries will qualify for the next loan with an increased ceiling if they repay on time or ahead of schedule. There is no penalty for early loan repayment.

The interest rates are as per the current rates of scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), cooperative banks, and SHG banks. Interest rates for non-banking financial companies (NBFCs) follow the Reserve Bank of India RBI standards set for them. So, the scheme’s interest rates would be applied as per the current RBI recommendations for NBFC and other lenders.

Vendors taking out loans via the program qualify for a 7 per cent interest rebate. The borrower’s account will be credited with the interest subsidy amount each quarter. For each fiscal year, lenders must submit quarterly claims for interest subsidies on June 30, September 30, December 31, and March 31.