Over 5 lakh street vendors apply for govt's `SAVNidhi' loan
13 August 2020
The number of loan sanctions and number of applications received under PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme have crossed the 5 lakh mark within 41 days of commencement of the lending process on 2 July 2020. The PM SVANidhi scheme has generated considerable enthusiasm among the street vendors, who have been looking for access to affordable working capital credit for re-starting their businesses post Covid-19 lockdown.
The PM SVANidhi Scheme, launched by ministry of housing and urban affairs under the ambit of ‘AtmaNirbhar Bharat Abhiyan’, aims at facilitating collateral free working capital loans up to Rs10,000 of 1 year tenure, to about 5 million street vendors in the country to resume their businesses post Covid-19 lockdown.
The scheme covers street vendors in the urban areas, including those from the surrounding peri-urban/ rural areas.
The scheme offers incentives in the form of subsidised interest rate of 7 per cent per annum on regular repayment of loan, cashback up to Rs1,200 per annum on undertaking prescribed digital transactions and eligibility for enhanced next tranche of loan.
PM SVANidhi Scheme envisages bringing ‘Banks at the door steps’ of these ‘nano-entrepreneurs’ by engaging non-banking financial companies (NBFCs) and the micro-finance institutions (MFIs) as lenders in addition to scheduled commercial banks - public and private, regional rural banks, cooperative banks, SHG banks etc.
The onboarding of the vendors on digital payment platforms is a very important component to build the credit profile of the vendors to help them become part of the formal urban economy.
Small Industries Development Bank of India (SIDBI) is the implementation partner for the scheme. A graded guarantee cover is provided, on portfolio basis, to these lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to encourage lending to street vendors.
Street vendors mostly operate their businesses on very thin margins. The micro-credit support under the scheme is expected to provide not only major relief to such vendors but also help them climb the economic ladder. Use of an integrated IT Platform (pmsvanidhi.mohua.org.in), web portal and mobile app has enabled the scheme to extend its reach and benefits to this segment of society with the objective of minimum government and maximum governance.