India’s vibrant urban landscape is defined by the bustling presence of street vendors, who play a vital role in ensuring the availability of essential goods and services at affordable prices. These hardworking individuals, known by various local names such as vendors, hawkers, or thelewala, are an integral part of the informal economy, catering to the daily needs of city dwellers.
However, the COVID-19 pandemic and the resulting lockdowns have dealt a severe blow to the livelihoods of these street vendors, who typically operate with a small capital base. In recognition of their importance and the need to support them during these challenging times, the Government of India has launched the PM SVANidhi Yojna (Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Yojna) , a comprehensive initiative aimed at providing much-needed financial assistance and empowering this crucial segment of the urban workforce.
The Objectives of the PM SVANidhi Scheme
The PM SVANidhi Scheme is a Central Sector Scheme, fully funded by the Ministry of Housing and Urban Affairs, with the following key objectives:
- To facilitate working capital loans of up to ₹10,000 for street vendors to help them resume their businesses.
- To incentivize regular repayment of the loans through an interest subsidy.
- To reward digital transactions by the street vendors through a cashback facility.
By addressing the immediate financial needs of street vendors and encouraging the adoption of digital payment methods, the scheme aims to formalize this sector and open up new opportunities for these hardworking individuals to climb the economic ladder.
Eligibility Criteria for the PM SVANidhi Scheme
The PM SVANidhi Scheme is available to street vendors engaged in vending activities in urban areas, provided that the respective State/UT has notified the rules and scheme under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014. Beneficiaries from Meghalaya, which has its own State Street Vendors Act, are also eligible to participate in the scheme.
The eligible street vendors are identified based on the following criteria:
- Street vendors in possession of a Certificate of Vending or Identity Card issued by the Urban Local Bodies (ULBs).
- Vendors who have been identified in the survey but have not yet been issued a Certificate of Vending or Identity Card. For such vendors, a Provisional Certificate of Vending will be generated through an IT-based platform, and the ULBs are encouraged to issue the permanent Certificate of Vending and Identification Card within one month.
- Street vendors who were left out of the ULB-led identification survey or have started vending after the completion of the survey, and have been issued a Letter of Recommendation (LoR) by the ULB or Town Vending Committee (TVC).
- Vendors from surrounding development/peri-urban/rural areas who are vending within the geographical limits of the ULBs and have been issued a Letter of Recommendation (LoR) by the ULB or TVC.
Identifying Beneficiaries Left Out of the Survey or from Surrounding Rural Areas.
To ensure that all eligible street vendors are covered, the scheme has provisions for identifying those who may have been left out of the initial survey or belong to the surrounding rural areas. In such cases, the ULB or TVC may consider the following documents to issue the necessary Letter of Recommendation (LoR):
- The list of vendors prepared by certain States/UTs for providing one-time assistance during the lockdown period.
- A system-generated request sent to the ULBs/TVCs for the issuance of LoR, based on the recommendation of the lender after verifying the applicant’s credentials.
- Membership details with vendors’ associations, such as the National Association of Street Vendors of India (NASVI), National Hawkers Federation (NHF), or Self-Employed Women’s Association (SEWA).
- Documents in the possession of the vendor that support their claim of being a street vendor.
- A report of the local inquiry conducted by the ULB or TVC, involving Self-Help Groups (SHGs) and Community-Based Organizations (CBOs).
The ULBs are required to complete the verification and issuance of Addressing the Needs of Vendors Who Returned to Their Hometowns.
The scheme also recognizes the unique challenges faced by street vendors who had to return to their native places due to the COVID-19 pandemic and the subsequent lockdowns. These vendors, whether from rural/peri-urban areas or city dwellers, will be eligible for the loan upon their return, as per the eligibility criteria mentioned earlier.
This provision ensures that the scheme caters to the needs of all street vendors, regardless of their current location, and provides them with the necessary financial support to resume their businesses once the situation normalizes.
Making the Beneficiary Data Publicly Available
To ensure transparency and accessibility, the scheme mandates that the State/UT/ULB-wise list of identified street vendors be made available on the website of the Ministry, State Government, ULBs, and the web portal developed for the purpose. This public availability of data will enable street vendors to verify their inclusion and also serve as a reference for other stakeholders, such as lenders and policymakers.
The Working Capital Loan and Its Features
Under the PM SVANidhi Scheme, eligible urban street vendors can avail a Working Capital (WC) loan of up to ₹10,000, with a tenure of 1 year and repayable in monthly installments. Importantly, no collateral will be required from the vendors for this loan.
The scheme also incentivizes regular or early repayment by making the vendors eligible for the next cycle of working capital loan with an enhanced limit. Additionally, no prepayment penalty will be charged from the vendors for repaying the loan before the scheduled date.
Interest Rates and Subsidy
The interest rates for the working capital loans under the PM SVANidhi Scheme vary depending on the type of lending institution:
- For Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, and SHG Banks, the prevailing interest rates of the respective institutions will apply.
- For Non-Banking Financial Companies (NBFCs) and NBFC-Microfinance Institutions (NBFC-MFIs), the interest rates will be as per the guidelines issued by the Reserve Bank of India (RBI) for the respective lender categories.
- For other lender categories not covered under the RBI guidelines, such as non-NBFC Microfinance Institutions (MFIs), the interest rates under the scheme will be as per the extant RBI guidelines for NBFC-MFIs.
To further support the street vendors, the scheme provides an interest subsidy of 7% on the working capital loans. This interest subsidy will be credited directly into the borrower’s account on a quarterly basis, provided that the account remains in the “Standard” (non-NPA) category as per the RBI guidelines.
The interest subsidy is available until March 31, 2022, and can be availed on both the first loan and any subsequent enhanced loans during this period. In case of early repayment, the admissible amount of subsidy will be credited in one go.
Promoting Digital Transactions
In addition to the financial assistance and interest subsidy, the PM SVANidhi Scheme also aims to incentivize digital transactions by the street vendors through a cashback facility. This initiative is designed to encourage the adoption of digital payment methods, which can help streamline the vendors’ financial record-keeping and potentially open up new opportunities for growth and integration into the formal economy.
The Impact and Potential of the PM SVANidhi Scheme
The PM SVANidhi Scheme represents a comprehensive and well-designed intervention to support the street vendor community, who have been disproportionately affected by the COVID-19 pandemic. By providing access to working capital loans, interest subsidies, and incentives for digital transactions, the scheme addresses the immediate financial needs of these vendors while also laying the groundwork for their long-term economic empowerment.
The scheme’s focus on formalizing the street vending sector through the issuance of Certificates of Vending and Identity Cards is a crucial step in recognizing the legitimacy and importance of this workforce. This, in turn, can help street vendors access other government welfare schemes and financial services, further enhancing their resilience and opportunities for growth.
Moreover, the scheme’s provisions for identifying and including vendors who may have been left out of the initial surveys or belong to surrounding rural areas demonstrate a commitment to ensuring that no one is left behind. This inclusive approach is essential for truly empowering India’s street vendor community and unlocking their full economic potential.
One of the key strengths of the PM SVANidhi Scheme is its collaborative approach, involving various stakeholders such as the Ministry of Housing and Urban Affairs, State/UT governments, Urban Local Bodies (ULBs), and lending institutions. This multi-stakeholder engagement ensures that the implementation of the scheme is coordinated and responsive to the needs of the street vendors on the ground.
The scheme’s emphasis on digital transactions also holds significant promise. By incentivizing the adoption of digital payment methods, the PM SVANidhi Scheme can help street vendors streamline their financial record-keeping, access digital banking services, and potentially integrate into the formal financial ecosystem. This, in turn, can enhance their creditworthiness and open up new avenues for growth and upward mobility.
Furthermore, the public availability of the beneficiary data can foster greater transparency and accountability, allowing street vendors to verify their inclusion and enabling policymakers, researchers, and civil society organizations to monitor the scheme’s implementation and impact.
Challenges and Considerations
While the PM SVANidhi Scheme holds immense potential, there are a few key challenges and considerations that need to be addressed for its successful and equitable implementation:
- Effective Identification and Inclusion of Beneficiaries: The scheme’s reliance on the existing survey data and the issuance of Certificates of Vending/Identity Cards by the ULBs may pose challenges in reaching out to the most marginalized and vulnerable street vendors, particularly those who have been left out of the formal identification process. Proactive efforts by the ULBs and TVCs to engage with community-based organizations and vendors’ associations will be crucial in ensuring comprehensive coverage.
- Capacity Building and Awareness Generation: Educating street vendors about the scheme’s features, eligibility criteria, and application process will be essential to maximize participation. Targeted outreach campaigns, in collaboration with local stakeholders, can help disseminate information and address any misconceptions or barriers to access.
- Streamlining the Application and Disbursement Process: The scheme’s success will depend on the efficiency and responsiveness of the application and loan disbursement processes. Ensuring seamless coordination between the ULBs, TVCs, and lending institutions will be crucial in minimizing delays and facilitating timely access to the working capital loans.
- Monitoring and Evaluation: Robust monitoring and evaluation mechanisms, with clear performance indicators, will be necessary to track the scheme’s reach, impact, and effectiveness. This data can inform future policy decisions and help refine the implementation strategies to better serve the needs of the street vendor community.
- Addressing the Unique Challenges of Women Street Vendors: Women street vendors often face additional barriers, such as access to finance, social stigma, and safety concerns. The scheme should consider incorporating targeted interventions and support systems to address the specific needs of this vulnerable group and promote their economic empowerment.
Conclusion
The PM SVANidhi Scheme represents a significant step forward in the Government of India’s efforts to support and empower the country’s vibrant street vendor community. By providing access to working capital loans, interest subsidies, and incentives for digital transactions, the scheme addresses the immediate financial needs of these hardworking individuals while also laying the foundation for their long-term economic and social integration.
As the scheme is implemented across the country, it will be crucial to monitor its progress, address any challenges, and continuously refine the strategies to ensure that no street vendor is left behind. With a collaborative and inclusive approach, the PM SVANidhi Scheme has the potential to transform the lives of millions of street vendors, unlocking their entrepreneurial spirit and paving the way for their sustainable growth and prosperity.