Finance Minister Nirmala Sitharaman announced in the Lok Sabha that the PM SVANidhi Scheme has benefited 78 lakh street vendors. Launched under the Atmanirbhar Bharat Abhiyan, the scheme aims to support street vendors by providing them with collateral-free loans. The Finance Minister stated that 2.3 lakh vendors have availed loans for the third time under this initiative.
What is PM SVANidhi Scheme?
The Ministry of Housing and Urban Affairs initiated the Prime Minister Street Vendors’ Atmanirbhar Nidhi (PM SVANidhi) Scheme on June 1, 2020. The scheme focuses on assisting street vendors, severely affected by the COVID-19 pandemic, in restarting their businesses without the need for any guarantee.
Under the scheme:
1. A working capital loan of up to ₹10,000, without any guarantee, is provided for a one-year tenure. Timely repayment allows beneficiaries to avail a second loan of ₹20,000 and a third loan of ₹50,000.
2. Regular repayment is encouraged through a 7% interest subsidy.
3. Digital transactions are promoted with a cashback of up to ₹1,200 per year for digital payments.
The scheme initially started by offering a working capital loan of up to ₹10,000, and later, recognizing the increased financial requirements, a second loan of up to ₹20,000 was introduced from April 9, 2021. Additionally, a third loan of up to ₹50,000 became available from June 1, 2022.
The Ministry modified the cashback scheme, effective from February 1, 2023. This modification provides a cashback of ₹1 for every digital transaction, capped at ₹100 per month and ₹1,200 per year.
The PM SVANidhi Scheme has played a crucial role in supporting street vendors during challenging times, contributing to their financial stability and promoting digital transactions.