Benefits of PM Svanidhi Yojana

Udyog Aadhar

PM Street Vendor’s AtmaNirbhar Nidhi, or commonly known as PM Svanidhi Yojana was launched on June 1, 2020, by India’s Hon. Prime Minister Narendra Modi Ji, as an ambitious special micro-credit facility to empower street vendors. In India, many are dependent on street vending to provide for themselves and their families. We see them everywhere, on streets, near railway stations, in trains, and around bus stops. Though vending is their necessity, they offer us much purchasing convenience. This section has been mostly neglected by banks and other financial institutions due to many reasons. Many don’t have a permanent residence or authorized vending place or license. Whenever they require credit for their business needs, they are not confident to approach a bank and rely on heavy interest cash loans. The onset of the pandemic followed by a lockdown pushed them in dire straits, as businesses stopped, resulting in a huge impact on their livelihood.

The new PM Svanidhi Yojana is a welcome step to change this scenario and empower them with micro-credit to help them in their personal as well business needs. The main intention of this scheme is to provide small credits for working capital loan to the street vendors, wherein they can take a collateral-free loan for one year and at low-interest rates. This can help them to revive their businesses and earn their livelihood back.

Main objectives of PM Svanidhi Yojana:

To enhance the usefulness of these loans, the PM Svanidhi Yojana has simple with helpful objectives that benefit the masses and are easy to understand. They are designed to help the loan seeker secure his business and importantly his livelihood.

• The prime objective of PM Svanidhi Yojana is to provide working capital loans of Rs. 10,000 at nominal rates of interest to every eligible street vendor.

• The loan also promotes Government’s focus on digital transactions. It helps to create awareness, maintains safety protocols with respect to current pandemic times and brings everyone to the same platform. For this, the scheme pays a cashback to the vendors that help them financially and encourages them to be more technologically sound and lead them towards Digitalization.

• The street vendors earn on what they sell. So, at times it may feel good to avail the loan but repaying the loan may pose a challenge for them. To offer a solution to this, PM Svanidhi Yojana incentivizes timely loan repayment. This encourages the vendors morally and at the same time makes the process a lot easier, beneficial and cost-efficient.

Main features of PM Svanidhi Scheme-

• It is a Central Sector Scheme. They are managed and funded directly by the central ministry.
• The proposed implementation of the PM Svanidhi Scheme is till March 2022.
• Initially a working capital amount of Rs. 10,000 will be provided.
• Classification of vendors- Any vendors operating a business in urban, rural and semi-urban areas on or before March 24. 2020 will be eligible to apply for the loans under this scheme.
• The vendor shall be provided with an Interest Subsidy of 7% in respect of timely or early repayment of the loan. Such vendors will also be eligible for higher loan amounts in future transactions.
• The street vendors will be provided with monthly cashback incentives to promote Make in India and Digital Transactions. This cashback will range from Rs. 50 to Rs 100. • The loans under this scheme are collateral-free.

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Documents required by the Urban Local Body (ULB) and Town Vending Committee (TVC) to generate Letter of Recommendation (LoR)

• ULB application form with candidate details
• Membership details of any of these:
 1. National Association of Street Vendors of India (NASVI)
 2. National Hawkers Federation (NHF)
 3. Self-Employed Women’s Association (SEWA)
• Possession of any supporting documents that claim the individual’s vending business
• A complete report of local inquiries conducted by ULB or TVC involving community-based organizations and/ or Self-Help Groups (SHGs)
• The ULBs have to verify the applicants within 15 days of submission of the application

Eligibility Criteria for PM Svanidhi Yojana

Loan under PM Svanidhi Scheme are available for all the street vendors active on and before 24th March 2020.

Here’s a list of scheme eligibility criteria as defined:

• Street vendors recognized by the ULBs and/or the ones possessing the ULB issued Identity card or Certificate of Vending
• The Vendors who have been recognized in the survey but haven’t received a Certificate of Identity card will be provided with a Provisional Certificate of Vending. ULB's will provide permanent identification cards to these vendors.
• Further, vendors without the above-mentioned documentation can become eligible by getting a Letter of Recommendation (LoR) issues by the ULB or TVC (Town Vending Committee)
• The vendors residing and doing business in the surrounding peri-urban or rural areas can be eligible by having the same letter of recommendation by TVC or ULB
• ULB/TVC Verified vendors who left their area of operation due to Covid-19 pandemic (before or during) will be eligible for the loan after they come back and resume their businesses.

To Know more about PM Svanidhi Yojana -

With the schemes wide appeal and to reach the masses, banks have been chosen wisely and specifically. Following Lending Institutions will disburse the loan

• Scheduled Commercial Banks
• Small Finance Banks (SFBs)
• Regional Rural Banks (RRBs)
• Cooperative Banks
• Self-help group Banks (SHG)
• Micro Finance Institutions (MFIs)
• Non-Banking Financial Companies (NBFCs)

This ambitious PM Svanidhi Yojana will play a major role in uplifting the spirit and livelihood of street vendors. The eligible people should take the most benefit of this scheme to resume their businesses and lead a life full of pride.

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