What is the PM SVANidhi Scheme? Street Vendor Loan Yojana Explained

Access to credit can change lives, especially for those running small businesses on the streets of India. Street vendors are a vital part of our urban economy, yet many lack formal support to grow their businesses and increase their income. The PM SVANidhi Yojana was launched to fix that gap. This scheme not only provides timely assistance but also helps unlock long-term potential in small businesses.

Here's everything you need to know about this impactful initiative.

What is the PM SVANidhi Scheme?

The PM SVANidhi Scheme is a micro-credit facility launched by the Ministry of Housing and Urban Affairs. It provides working capital loans of up to INR 10,000 to street vendors for a tenure of one year. The loan is collateral-free and comes with several added incentives. Nearly 50 lakh street vendors across urban and semi-urban India are eligible for support through this programme.

Full Form of PM SVANidhi

The full form stands as Pradhan Mantri Street Vendor's AtmaNirbhar Nidhi. It signifies a step toward making street vendors self-reliant by giving them financial access and recognition. It aims to transform informal street businesses into formally supported micro-enterprises.

Objective of the SVANidhi Yojana

The core purpose of this scheme is to help street vendors restart, sustain, and expand their businesses after disruptions caused by the COVID-19 pandemic. It aims to bring informal vendors into the formal credit system and empower them economically. The scheme promotes digital adoption, fosters financial discipline, and enhances creditworthiness.

Key Features of the PM SVANidhi Scheme

• Collateral-Free Working Capital Loan of up to INR 10,000 with one-year tenure.
• An interest subsidy of 7% per annum on timely repayment is credited directly to the bank account.
• Monthly cashback rewards up to INR 100 for undertaking a set number of digital transactions (maximum INR 1200 per year).
• Upon successful repayment of the first loan, vendors can apply for higher loan amounts of INR 20,000 and INR 50,000 in the second and third tranches, respectively.
• Helps build a credit score, enabling future access to financial products from institutions like banks and NBFCs.
• Loans are processed through a wide base of lending institutions, including Scheduled Commercial Banks, MFIs, NBFCs, and SHG Banks.

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Eligibility Criteria for PM SVANidhi Scheme

The scheme is designed to cover a wide group of vendors. To apply:

• Vendors must be engaged in street vending on or before March 24, 2020.
• Possess a Certificate of Vending/ID card issued by Urban Local Bodies (ULBs).
• Vendors identified in ULB surveys but yet to receive a certificate will be issued a Provisional Certificate.
• Vendors left out of ULB surveys or new vendors can apply with a Letter of Recommendation (LoR) from the ULB or Town Vending Committee.
• Vendors from peri-urban/rural areas who operate within ULB limits and have an LoR.

How to Apply for PM SVANidhi

There are two simple ways to apply:

1. Online: Visit the official PM SVANidhi portal (https://pmsvanidhi.mohua.gov.in) and complete the application.
2. Offline: Approach the nearest Common Service Centre (CSC) for help in submitting the form.

Ensure your mobile number is linked to your Aadhaar and verify your eligibility beforehand. It’s also helpful to keep digital transaction tools like UPI apps ready to avail of cashback benefits.

Benefits of PM SVANidhi for Street Vendors

• Quick financial support without the burden of collateral.
• Lower interest cost due to 7% subsidy.
• Encourages the use of digital payments, enabling vendors to become tech-enabled and more efficient.
• Improved business stability and growth potential with working capital.
• Future access to higher loans and formal finance due to credit history development.
• Helps vendors become part of India’s formal economy and easily access other government schemes.

Also Read : Top Successful MSME Businesses in India

Documents Required for PM SVANidhi Scheme

To apply under the PM SVANidhi Scheme, keep the following documents ready:

• Aadhaar card and Voter ID (for identity verification).
• Certificate of Vending or Letter of Recommendation from ULB/TVC.
• Mobile number linked with Aadhaar.
• Bank account details and passbook copy.
• Passport-sized photograph.
• Digital payment application details (optional but beneficial for cashback).

Challenges and Awareness under PM SVANidhi Scheme

Despite the benefits, many street vendors face challenges:

• Lack of awareness about the scheme and application process, especially in smaller cities.
• Difficulty in documentation, especially for those without formal identity papers or proof of vending.
• Digital illiteracy may limit access to cashback incentives.

To address this, awareness camps, community training sessions, and active support from ULBs and CSCs are being deployed to improve enrolment. In many cities, NGOs and local bodies are stepping in to assist vendors with documentation and online applications.

Let’s take a simple example:

A tea seller in a small urban area applies for a PM SVANidhi loan of INR 10,000. They repay the loan regularly and earn a 7% interest subsidy, amounting to INR 700 over the year. They also make regular digital payments and receive a cashback of INR 100 per month, adding up to INR 1200 annually. After repaying the loan, they become eligible for a second loan of INR 20,000, helping them grow their business. This not only improves their income but also builds their credit score for future financial support.

Conclusion

Street vendors are the backbone of local markets, providing everyday convenience in urban India. The PM SVANidhi Scheme is an important initiative that offers them respect, recognition, and financial support through access to a business loan. This program enables vendors to rebuild their livelihoods, access formal financial services, and grow their businesses with confidence. If you or someone you know is eligible, applying for this scheme could be a valuable step toward business resilience and economic empowerment. It also supports business loan for womens, helping empower female entrepreneurs in the informal sector.

FAQs

Q.1. Who is eligible for the PM SVANidhi loan?

A. Street vendors who were actively vending in urban areas on or before March 24, 2020, and have a Certificate of Vending or a Letter of Recommendation from the local authority are eligible.

Q.2. How much loan is given under PM SVANidhi?

A. The initial loan amount is INR 10,000. Upon successful repayment, vendors become eligible for higher amounts—INR 20,000 in the second cycle and INR 50,000 in the third.

Q.3. Is the PM SVANidhi loan free?

A. No, it is not free. However, it is interest-subsidised. Borrowers who repay on time receive a 7% annual interest subsidy and up to INR 1200 cashback on digital transactions.

Q.4. Can I apply online for the PM SVANidhi Scheme?

A. Yes, you can apply online through the official PM SVANidhi portal or offline via the nearest Common Service Centre (CSC).

Q.5. What are the benefits of repaying the loan on time?

A. Timely repayment earns an interest subsidy, eligibility for higher loan amounts, a better credit score, and access to future formal loans.

Q.6. Can rural street vendors apply for this scheme?

A. Yes, rural vendors operating in urban or peri-urban areas and holding a Letter of Recommendation from the ULB or TVC are eligible to apply.

Disclaimer:

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