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An Overview of PM SVANidhi

The scheme has been launched to facilitate the credit flow of working capital to street vendors so as to resume their business that has been adversely affected amid the COVID-19 pandemic.

• The scheme is a Central Sector Scheme i.e. fully funded by the Ministry of Housing and Urban Affairs. 

Objectives:  

• To facilitate working capital loan up to 10,000

• To incentivize regular repayment

• To reward digital transactions

The scheme will help formalize the street vendors with the above objectives and will open up new opportunities to this sector to move up the economic ladder.

Lending Institutions:  

Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs) & SHG Banks established in some States/UTs e.g. Stree Nidhi etc.

Eligibility of States/UTs: 

The Scheme is available for beneficiaries belonging to only those States/UTs which have notified Rules and Scheme under Street Vendors (Protection of  Livelihood and Regulation of Street Vending) Act, 2014. Beneficiaries from  Meghalaya, which has its own State Street Vendors Act may, however,  participate.

Eligibility of Beneficiaries: 

The Scheme is available to all street vendors engaged in vending in urban areas as on or before March 24, 2020. The eligible vendors will be identified as per the following criteria:

• Street vendors in possession of Certificate of Vending / Identity Card issued by Urban Local Bodies (ULBs)

• The vendors, who have been identified in the survey but have not been issued Certificate of Vending / Identity Card

Brief Details: 

• Rate of Interest:  

1. Scheduled Commercial Banks, RRBs, SFBs — lend at prevailing rates

2. NBFCs, NBFC-MFI — lend according to RBI guidelines

• Interest Subsidy: The vendors, availing loan under the scheme, are eligible to get an interest subsidy. The interest subsidy amount will be credited into the borrower’s account quarterly. In the case of early payment, the admissible amount of subsidy will be credited in one go.

• Promotion of Digital Transactions: The scheme will incentivize digital transactions by vendors through a cashback facility. The transaction trail so created will build the credit score of vendors for enhancing their future credit needs. The network of lending institutions and digital payment aggregators like NPCI (for BHIM), PayTM, GooglePay, etc. will be used to onboard the street vendors for digital transactions.

Credit Guarantee: 

• The Scheme has a provision of Graded Guarantee Cover for the loans  sanctioned to be administered by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE

• All loans given by each lending institution under the scheme will be considered for coverage under the guarantee.

• All the participating lending institutions shall be eligible to avail this guarantee cover without any charges.

• Further, a representative of MoHUA shall be a special invitee at the meetings of the ard of trustees of CGTMSE whenever the Scheme is taken up for consideration.

The SVANidhi app: 

• An Integrated IT Platform along with Mobile App will be developed by the Ministry for the administration of the scheme. This Portal will provide a one-stop solution for administration of the scheme.

• The IT Platform will integrate with the vendor’s databases across the  States/ UTs, BCs/ constituents/ agents of lending institutions, digital payment aggregators and PAiSA portal of MoHUA and Udyami Mitra portal managed by Small Industries Development Bank of India (SIDBI).

Capacity Building and Financial Literacy: 

• A comprehensive capacity building plan will be developed to build the capabilities of different stakeholders like Business Correspondents/ Agents of lending institutions like banks/ NBFCs/ MFIs, SHGs/ federations,  implementing bodies like ULBs/ TVCs and digital payment aggregators to ensure effective delivery of Scheme.

• Capacities of digital payment aggregators like NPCI and payment aggregators will be leveraged to impart financial literacy to the street  vendors for encouraging on-boarding on digital platforms.