PM SVANidhi Yojana: Purpose, Benefits and Application Process

PM SVANidhi scheme (PM Street Vendor), which was introduced in June in the midst of the pandemic, is a micro-credit facility that offers a collateral-free loan of Rs 10,000 with low interest rates for a term of one year to street vendors. 

The scheme, part of the AtmaNirbhar Bharat Abhiyaan, has received 31,64,367 applications from across the nation so far (except from Sikkim, which is officially not taking part in it). 16,77,027 of the overall applications were sanctioned and 12,17,507 disbursed. 

Purpose of the scheme

The COVID-19 pandemic and the national lockdown have left street vendors and many othersjobless. The aim of the scheme is to help the vendors financially get back on their feet. It aims to build a credit score for the suppliers in the long run, as well as to construct a digital database of their socio-economic status, so that they can then use the central government programs. The program further aims to formalize the informal sector of the economy and, in the future, provide them with safety nets and a way of using loans. 

Most manufacturers are part of what people call the underground economy, and frequently borrow from private lenders who demand exorbitant interest rates on them. This loan charges interest rates below 12 percent which generates a vendor's credit score so that they can gain more if they repay the loan on time. In addition, Sanjay Kumar, Joint Secretary of the Union Ministry of Housing and Urban Affairs, said that by developing a digital record of them and their socio-economic profile, it will help them use various other 8-9 central government schemes that provide a sort of safety net, helping to mitigate their poverty. 

How to apply for it? 

The loan will be used by all vendors that have been selling from or prior to March 24, 2020 and with a vending stamp. As per the 2014 Street Vendors Act, the Town Vending Committees (which includes local authorities and vendors from an area) grant a vending certificate after a survey of all vendors has been conducted. 

But because the study has not yet been completed by many states and towns, many vendors are unable to offer any such vending certificates. Instead, as per the plan, for each vendor who wants to use the loan, the urban local authorities, in this case the municipalities will have a letter of recommendation. 

These records, including proof of identity, are submitted to a special portal created for the system, and banks approve the loans and disburse them, preferably, within 10-15 days. 

What difficulties are faced by vendors while applying for a loan? 

In compliance with the rules notified by the Delhi government in 2016, Delhi has not yet conducted a city-wide survey of vendors. Vendors who have earned the loans are often evicted either by the police or by ULB officials from their place, impacting their only source of income and their ability to repay the loan. Mobile numbers of different vendors are not affiliated with their Aadhar cards, and camps have now been set up by different ULBs to resolve this problem. In order to correct this problem and support the vendors in the online application process, several vendor groups are now setting up camps at markets. 

If the city has not completed a Town Vending Committee survey as per the Act, does the scheme legitimize the applicants' sales? 

If the LOR has been released by the ULBs, its mandate lasts one month, during which the ULBs can perform a survey for the issuance of a vending license. But since it is a state issue, it is only possible for the central government to guide or raise awareness of the value of doing so and not to evict vendors who have made use of the loan but do not have a certificate, Kumar said. 

Rajesh Goyal, deputy commissioner of the Karol Bagh district, which is part of the North Delhi Municipal Corporation, said, "The LORs issued by the ULB do not grant any legal permission or vending rights, as the scheme does not mention this." 

At present, the largest number of applications (over 50,000) and disbursement rates has been seen in Hyderabad. In that order, Bengaluru, Mumbai, Chennai, Delhi and Kolkata are ranked next, Kumar said. Just now has West Bengal announced the scheme, he said. 

The top performing states are Telangana, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh, which have also issued vending certificates either before the pandemic or in the past few months, Kumar said. Over 40,000 applications have been submitted from Agra, which beats even a big city like Delhi.