Central Lunches a Scheme For Street Vendor

The Ministry of Housing and Urban Affairs launched a PM Svanidhi, or Pradhan Mantri street Vendor Atma Nirbhar Nidhi scheme, in this special micro-credit facility an affordable loan up to Rs. 10,000 to more than 50 Lakh credit facility to street vendors who had their businesses operational on or before 24 March. The scheme is valid until March 2022.

In this scheme, the vendor can avail of working capital loans up to ₹10,000, which is repayable in monthly installments within one year. On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer (DBT) on a six-months basis. There will be no penalty on the early repayment of loans.

Who can take a loan?

The vendors, hawkers, thelewalas, rehriwalas, theliphadwalas in different areas/

contexts that supply goods and services. Street vendors belonging to the surrounding peri-urban/rural areas are also included.

“They usually work with a small capital base taken on very high-interest rates (sometimes as high as 1% per day- amounting to nearly 400% per annum) from informal sources. Further, they might have consumed their savings and high-cost capital during the lockdown. Therefore, there is an urgent need to provide affordable credit for working capital through formal banking channels to street vendors to help them resume the business," a press statement by the ministry said.

The timely payment will ensure that the vendor gets a creditable credit score and are eligible for a higher loan. The small industries Development Bank of India will help to implement this scheme and manage the credit guarantee to the lending institution through Credit Guarantee Fund Trust for Micro and Small Enterprise.