The Union Cabinet launched Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi Scheme (PM SVANIDHI) on 1st June, 2020. This special micro-credit facility scheme will provide affordable loans to street vendors and they can revive their businesses or livelihood without any further delay due to lockdown by the pandemic of COVID-19.
Housing and Urban Affairs Ministry launched the scheme in pursuance of the announcement made by Finance Minister Nirmala Sitharaman last month in May 2020.
Under the scheme, the government will recognize the significant role of the street vendors at making goods and services available at the doorstep dwellers.
The main object of the scheme to benefit over 50 lakh street vendors, who had been vending in urban areas on or before 24th March 2020. The duration of the scheme is till March 2022.
Under the scheme, the central government provides an affordable loan of up to ₹10,000 to street vendors, that can be returned by the vendors as monthly installments within a year.
The street vendors belonging to the surrounding rural areas or peri-urban are being included as beneficiaries under the urban livelihoods program for the first time.
Information and broadcasting minister Javadekar said that “Those who repay their loans on time will get 7% annual interest as subsidy which will be transferred in their bank accounts and there is no provision for any penalty.”
How Urban Local Bodies helps in the implementation of the scheme:
For the implication of the scheme Urban local bodies will be playing a pivotal role as the lending institutions under the scheme such as Regional Rural Banks (RRBs), Scheduled Commercial Banks (SCBs), Cooperative Banks, Small Finance Banks, Micro Finance Institutions (MFIs), NBFCs, and Self-Help Groups (SHGs).
It is the first time that NBFCs/MFIs/SHG Banks have been allowed in a scheme for urban poor, because of their ground-level presence and proximity to the urban poor including the street vendors.
In also addition, 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 PM SVANIDHI scheme will also incentivize digital transactions by the street vendors through monthly cashback.