The PM SVANidhi (Prime Minister’s Street Vendor’s Atmanirbhar Nidhi) scheme rolled out in a series of measures by the Prime Minister and the Finance Ministry to create a comprehensive boost for self-reliance of India’s economy given rising tensions with neighbours, and a looming global economic crisis is supposed to make collateral-free loans, up to Rs 10,000 available for Street Vendors.’
PM SVANidhi Scheme to provide affordable loans to street vendors
The PM SVANidhi scheme has already made some headway with 266 crores worth loan already disbursed by various banks. India’s largest lender- SBI is currently leading this effort with 75,000 sanctioned loans, following with a considerable margin are the Union Bank, Bank of India and Canara Bank.
Suryoday Small Finance Bank (previously known as Suryoday Micro Finance) has also started dispensing loans under the said scheme to its microfinance customers.
However, the target set forth for the scheme is of 50 lakh such loans, out of which only 2.7 lakh have yet been disbursed. The number of applications stands at 21 lakhs for the same.
The recent push from the Finance Ministry comes right before the festival season in the country. It is out of grave concerns for such local vendors falling in debt-trap as most of their income was put to an abrupt stand-still during the lockdown. Many might be forced to borrow from lenders charging high rate of interest or looking for unaffordable securities etc.
Although banks have been allowed to charge market rates, the government has extended a 7% interest subsidy under the PM SVANidhi (Prime Minister’s Street Vendor’s Atmanirbhar Nidhi) . for accepting digital payments the borrowers can benefit by way of cashback and several associated monetary rewards.
In any case, a borrower does not have municipal licences, they can avail of the loans under the said scheme by providing a provisional certificate of vending from their respective urban body. Loans by banks under the scheme are directed to address these very issues and save the economy of a massive debt crisis among its lowest rung of working forces.