Pradhan Mantri Swanidhi Yojana: The path to self-reliance for street vendors

On India’s streets, alleys, and corners of markets, millions of people earn their livelihood through small carts, hawkers, or shops. These street vendors are the life of our cities. Whether it’s the morning tea cart, the person selling spicy golgappas in the afternoon, or the amma selling vegetables in the evening—these people are a part of our everyday life. But the COVID-19 pandemic has badly affected the lives of these people. During the lockdown, their business came to a halt, and the livelihood of many families was in danger.

Table of Contents

In view of this challenge, the Government of India launched thStreet Vendor Atmanirbhar Nidhi (PM SVANidhi) scheme on June 1, 2020. This scheme has been created to provide financial assistance to street vendors and make them self-reliant. In this article, we will talk about this scheme in detail—what it is, what is its objective, who can avail it, and how it is changing the lives of street vendors.

What is PM Swanidhi Scheme?

PM Swanidhi Yojana is a special micro-credit facility under which affordable loans are given to street vendors without any guarantee. Its aim is to help those people stand back on their feet whose business was affected due to Kovid-19. This scheme is being run under the Ministry of Housing and Urban Affairs and aims to benefit about 50 lakh street vendors across the country.Under this scheme, street vendors are given loans in three different phases:

First Installment: Working capital loan up to Rs 10,000, repayable in 12 months.
2nd Installment: Loan up to Rs 20,000 on timely payment of 1st installment.
3rd Installment: Loan up to Rs 50,000 after paying the 2nd installment.

The loan is given without any guarantee (collateral-free), making it easier for small businessmen to avail it. Also, this scheme also has a cashback facility to promote digital transactions.

Objective of the scheme

Objective of the schemeThe main objective of this scheme is to empower street vendors economically. Due to COVID-19, many vendors lost their business, and they did not have the capital to restart their work. Through this scheme, the government has set the following goals:

Providing affordable and easy loans to street vendors.
Helping them restart their business.
Encouraging digital transactions so that they can become part of the modern economy.
To make street vendors self-reliant and secure their livelihood.

This scheme not only provides financial help but also gives respect and recognition to the vendors in the society. The government believes that street vendors are an important part of the urban economy and if their hard work is channelized in the right direction, they can not only support their families but also contribute to the country’s economy.

Who can avail the benefit of this scheme?

There are certain eligibility conditions to avail the PM Svanidhi scheme. The scheme is primarily for street vendors operating in urban areas, but vendors from nearby semi-urban and rural areas can also avail the benefits, provided they sell within the geographical limits of urban local bodies (ULBs).

The following people can apply for eligibility:

Vending Certificate/Identity Card Holders: Street vendors who possess a Certificate of Vending or Identity Card issued by Urban Local Bodies (ULBs).
Vendors identified in survey: Vendors who have been identified in the survey of ULBs but have not yet received the certificate of vending. For such vendors, provisional certificate is generated through IT based platform.
Other Vendors: Those who vend within the limits of ULBs and have a Letter of Recommendation issued by the ULBs or Town Vending Committee (TVC).

Moreover, this scheme is open to all street vendors, whether they sell fruits and vegetables, food items, clothes, or any other small items.

Interest Rates and Subsidies

Interest Rate and SubsidyThe most special thing about this scheme is that it is a loan without guarantee, and its interest rates are also very low. Interest rates may vary slightly depending on the banks, but usually it is lower than the market rate. Apart from this, the following benefits are also given by the government:

7% Interest Subsidy: If the vendor repays the loan on time, he gets an interest subsidy of up to 7%, which is directly deposited into his bank account.
Cashback facility: Vendors get cashback on making digital transactions. For example, one can get a cashback of up to Rs 100 per month, which encourages digital payments.

Impact of the scheme

PM Swanidhi Yojana has so far changed the lives of lakhs of street vendors. A recent post stated that the scheme has achieved its target of covering 50 lakh street vendors. In states like Bihar, more than 70,500 vendors have repaid loans worth Rs 80.18 crore, which shows the success of the scheme.The scheme has not only provided financial help but also connected street vendors to the digital economy. Many vendors adopted digital payment systems like UPI for the first time, bringing transparency to their business and making transactions easier for customers.

Challenges and Solutions

Though the scheme has been quite effective, there are still some challenges. Many vendors are not fully aware of the scheme, or face difficulties in submitting documents. Also, the process of issuing vending certificates by ULBs is slow in some areas.

The government has taken several steps to solve these problems:

Awareness campaign: Government and banks are working together to spread awareness about the scheme
IT based platform: Digital platform has been launched for generating Provisional Vending Certificate.
Help of CSC Centers: The application process has been made easier through CSC centers in rural and semi-urban areas.

Conclusion

Pradhan Mantri Swanidhi Yojana is a ray of hope for street vendors. It not only gives them financial support but also promotes their hard work and self-esteem. From small carts to rehri walas, this scheme is for every person who works hard day and night to feed his family.

If you or any street vendor around you is there, then definitely tell about this scheme. Contact your nearest bank, ULB, or CSC center and take advantage of this scheme. This small step can take your business to new heights.