Recently, the central government has made an important decision to update the PM Svanidhi Scheme. Under this scheme, a credit card with a credit limit of up to ₹50,000 can be obtained, along with an additional loan of ₹10,000. This scheme provides microloans without any guarantee, giving street vendors a great opportunity to get back on their feet. This scheme continues to be a lifeline for street vendors.
What is the PM Svanidhi Scheme
The central government launched this scheme in June 2020 to provide financial assistance to street vendors during the COVID-19 pandemic. The primary objective of this scheme was to help street vendors facing livelihood challenges due to the COVID-19 pandemic to restart their work and become self-reliant. Therefore, this scheme was named PM SVANidhi (Prime Minister Street Vendor Atmanirbhar Nidhi).
Through this scheme, an effort has been made to promote the businesses of street vendors by providing them with microloans. This government loan scheme protects them from the debt trap of expensive moneylenders and provides access to loans at very affordable interest rates. More than 2.5 million street vendors have benefited from this scheme.
Complete Loan Arrangement Under the PM Svanidhi Scheme
Under this scheme, guarantee-free loans are provided in a phased manner. The first loan is up to ₹10,000, with a 7% interest subsidy and a repayment period of 12 months. Only after successfully repaying this first loan can a second loan be obtained, up to ₹20,000. This also has a 7% interest subsidy and can be repaid within 12 to 18 months. The third loan, ranging from ₹30,000 to ₹50,000, is available after repaying the second loan. This also has a 7% interest subsidy and can be repaid within 18 to 36 months.
Features of the PM SVANidhi Scheme
The biggest advantage of this scheme is that small loans are easily available without falling into the trap of moneylenders. No collateral is required to obtain the loan. The government also provides a 7% interest subsidy, and cashback of up to ₹100 per month is available on digital transactions. You can also repay the loan early, at no additional charge.
Eligibility for the Scheme
Certain eligibility criteria must be met to avail the PM SVANidhi Scheme. This scheme is for street vendors living in cities or towns. Street vendors must have a Vending Certificate or ID Card from an Urban Local Body (ULB). If their name is not included in the local body survey, a Letter of Recommendation (LoR) will be required.
How to Apply
Visit the official portal to apply online. Click on the Applicant option on the homepage and log in using your mobile number and OTP. Now, select the Vendor Category and enter the Survey Reference Number received from the ULB. Fill in the required information correctly, enter your bank account details, and submit the form. Note: This scheme is currently being updated, so new applications are not being accepted. You can also fill out the form by visiting a Common Service Center (CSC).
Required Documents
The documents required for the PM SVANidhi Scheme include an Aadhaar card, mobile number (linked to Aadhaar), bank passbook, street vendor certificate/identity card, and, if these documents are not available, a verification certificate from the Municipal Corporation. For the second loan, a certificate of closure of the previous loan will also be required.