PM SVANidhi- Objectives & Benefits
Background
Street vendors, also named as vendors, hawkers, thelewala, rehriwala, theliphadwala etc. in different areas/contexts represent a very important constituent of the urban informal economy and play a significant role in ensuring availability of the goods and services at the door-step of the city dwellers. They supply goods such as, vegetables, fruits, ready-to-eat street food, tea, pakodas, breads, eggs, textile, apparel, footwear, artisan products, books/ stationary etc. The services include barber shops, cobblers, pan shops, laundry services etc. The COVID-19 pandemic and consequent lock-downs have adversely impacted the livelihoods of these street vendors. Since their capital base is small, they might have consumed the same during the lockdown. Looking to their urgent need of credit requirement for working capital and resuming their business again, the scheme was launched with following objectives.
Objectives
- To facilitate working capital loan up to Rs.10,000/-
- To incentivize regular repayment; and
- To reward digital transactions
PM SVANidhi is a Central Sector Scheme i.e. fully funded by Ministry of Housing and Urban Affairs.
Eligibility of States/UTs
The Scheme is available for beneficiaries belonging to only those States/UTs which have notified Rules and Scheme under Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. Beneficiaries from Meghalaya, which has its own State Street Vendors Act, may, however, participate.
Eligibility Criteria of Beneficiaries
Earlier the Scheme was available to all Street Vendors engaged in vending on or before March 24, 2020. The Scheme is available to all street vendors engaged in vending in urban areas. The eligible vendors will be identified as per following criteria:
- Street vendors having 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.)
- Street Vendors, left out of the ULBs 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); and
- 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.
Further, ULBs may adopt any other alternate way for identifying such vendors with a view to ensure that all the eligible vendors are positively covered.
Data in Public Domain
The State/UT/ULB-wise list of identified street vendors will be made available on the website of the Ministry/State Government/ULBs and Web Portal developed for the purpose.
Product Details
- Loan Limit: Urban street vendors will be eligible to avail a collateral free Working Capital (WC) loan of up to Rs.10, 000/- with tenure of 1 year and repaid in monthly installments. On timely or early repayment, the vendors will be eligible for the next cycle of working capital loan with an enhanced limit.
- Rate of Interest: In 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 case of NBFC, NBFC-MFIs etc., interest rates will be as per RBI guidelines for respective lender category.
- Interest Subsidy: Interest subsidy @7% will be credited into the borrower’s account quarterly. The subsidy amount is claimed by lender for quarters ending as on June 30, September 30, December 31 and March 31 during each financial year. Subsidy will only be considered for Standard account. 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.
- Promotion of Digital Transactions: The scheme will incentivize digital transactions by vendors through cash back facility. The onboarded vendors would be incentivised with a monthly cashback in the range of Rs.50 – Rs.100/-.
- Lending Institution: Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs) & SHG Banks established in some States/UTs e.g. Stree Nidhi etc.
Illustration
Loan Limit: Rs.10, 000/-
(Amount in Rs.)
Month Principal Interest @24% EMI Interest Subsidy @7% Cash Back Incentive Total Benefit (A) (B) (C) (D) (E) (D+E) 1 746 200 946 58 100 158 2 761 185 946 54 100 154 3 776 170 946 50 100 150 4 791 154 946 46 100 146 5 807 139 946 42 100 142 6 823 122 946 36 100 136 7 840 106 946 32 100 132 8 856 89 946 27 100 127 9 874 72 946 22 100 122 10 891 55 946 17 100 117 11 909 37 946 12 100 112 12 927 19 946 6 100 106 Total 10,001 1,348 11,349 402 1200 1602 % w.r.t interest 100% 30% of interest 88% of interest 118%
Here, the Maximum Cashback amount and the Interest subsidy amount would sum up to Rs.1, 600 (Rs.1, 200 as cashback and Rs.400 as interest subsidy), which is 118% of the total interest of Rs.1,348 on a loan of Rs.10,000 with an interest rate of 24%.
See also…
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