Context: 

This article is based on the news “PM SVANidhi boosted annual income of street vendors by Rs 23,000: Study” which was published in the Indian Express. A recent study on the impact of PM SVANidhi, commissioned by the Union Ministry of Housing Affairs, confirmed that PM SVANidhi boosted the annual income of street vendors by Rs 23000.

PM SVANidhi Scheme: Key Highlights

• Under PM SVANidhi
  • 60.65 lakh vendors – availed first term loan
  • 16.95 lakh vendors – availed second term loan
  • 2.43 lakh vendors – availed third term loan
• The study concluded that no significant improvement was seen in street vendors getting formal credit from other sources.
  • Only 9% of the beneficiaries had loans from other financial institutions.

Background Of PM SVANidhi Scheme

The livelihood of street vendors was adversely impacted during the COVID-19 pandemic.

• The small capital base, on which they work was consumed during the lockdown.
• To help street vendors resume their livelihood, the scheme was launched.

What Is PM SVANidhi?

• PM Svanidhi is a special micro-credit scheme, launched by the Ministry of Housing and Urban Affairs to provide financial assistance to street vendors.
• Aim: To empower street vendors by facilitating access to formal credit, enabling them to improve their business and livelihoods.
• Atmanirbhar Bharat Abhiyan: The scheme was announced to provide economic stimulus under the Atmanirbhar Bharat Abhiyan, implemented from 1st June 2020.

• Implementation Partners Of PM SVANidhi

• • SIDBI:  Along with the Ministry of Housing and Urban Affairs, the Small Industries Development Bank of India (SIDBI) will be implementing the scheme.
  • Urban Local Bodies (ULBs): Helps beneficiaries by reaching them to connect under the scheme efficiently.

• Features Of PM SVANidhi

• • Central Sector Scheme: PM-SVANidhi is a central sector scheme.

• Collateral Free Loan: It’s a collateral-free loan of up to Rs 50,000 in incremental tranches for eligible street vendors
  • First tranche of Rs 10,000 
  • Second trench of Rs 20,000 subject to repayment of the first trench.
  • Third trench of Rs 50,000 after the repayment of the second trench.
• Breaking community barriers: It connected marginalized urban vendors, in which more than 75% of loans were given to non-general categories. 
• Interest subsidy: It offers an interest subsidy of 7% per annum on regular loan repayment.
• No penalty on early repayment: No penalty will be made on clearance of debt before the scheduled time.
• Financial Inclusion: The scheme helps in organizing the vendors in a formal financial system which not only helps in increasing digital transactions but also increasing transparency.

Beneficiaries Are Covered Under PM SVANidhi

• All the beneficiaries belonging to those States/UTs, notified under Rules and Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act 2014, are eligible under the scheme.
• Even the vendors from Meghalaya, the state having its own state street vendors act, are eligible under the PM SVANidhi.

Significance Of PM SVANidhi Scheme

• Access to Formal Credit: The PM SVANidhi scheme provides street vendors with access to formal credit, which was not available to them earlier. This helps them to meet their working capital requirements and expand their businesses.
• Improved Business Performance: With access to credit, street vendors can invest in better equipment, inventory, and marketing, which can help them improve their business performance and income.
• Financial Inclusion: The PM SVANidhi scheme brings street vendors into the formal financial system, which can help them access other financial products and services in the future.
• Social Security: The PM SVANidhi scheme also provides street vendors access to social security schemes such as accident insurance and pension.

News Source: Indian Express and The Tribune