PM SVANidhi Scheme Revamped: Street Vendors To Get Credit Cards, Increased Loans

The government is going to overhaul the PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) scheme to offer more financial support to street vendors. Under the strategy, vendors will be able to access increased subsidised loans and new credit cards tied to UPI with a Rs 30,000 credit limit. The step is expected to assist vendors in handling their working capital more effectively as well as expand their businesses through formal financial facilities.

As per a report by The Times of India dated May 30, the banks will issue these credit cards to street vendors on behalf of whom the first three loan instalments have been repaid. These instalments were previously fixed at Rs 10,000, Rs 20,000, and Rs 50,000. After vendors clear these amounts in time, they will be eligible for the new credit facility with a limit of Rs 30,000. The banks will determine the repayment conditions of the credit card.

PM SVANidhi To Facilitate Rural Migrants Moving To Cities

The revamped PM SVANidhi scheme also intends to cover rural street vendors who move to cities for employment. Previously, the scheme primarily targeted urban vendors. Now, by extending it to rural migrants, the government hopes to expand the coverage of the scheme and reach a larger number of informal workers.

Up to another Rs 10,000 could be infused into the existing loan sizes to enable vendors to cover their increasing financial requirements. The proposal is to allow vendors to take more loans and use the funds to purchase inputs or upgrade their stalls without resorting to expensive informal loans.

PM SVANidhi's Impact Since 2020

The initial PM SVANidhi scheme was introduced in the year 2020 amid the Covid-19 pandemic. During that time, most of the street vendors had lost their means of livelihood and required immediate assistance. The scheme provided them with small working capital loans at subsidised interest rates, enabling them to revive their businesses. Over 68 lakh vendors have availed themselves of the scheme since its introduction.

In her Budget speech on Union Budget, Finance Minister Nirmala Sitharaman had announced the PM SVANidhi scheme will be upgraded. She had announced the upgraded version would have increased loan amounts, credit cards with a limit of Rs 30,000, and skill development assistance for vendors.

The credit cards that are tied to UPI should facilitate easy transactions for both the vendors and the buyers. The cards will also enable vendors to establish a formal credit history, which helps when seeking loans in the future. With improved credit ratings, vendors can avail themselves of more funds at reduced interest rates from banks and financial institutions.

Banks' Role In Boost Growth

The inclusion of banks in the PM SVANidhi scheme is key to its success. They will not only provide credit cards but also guide vendors on how to use them responsibly. This step is expected to bring more street vendors into the formal banking system and reduce their dependence on moneylenders, who often charge very high interest rates.

Expanding the scheme to the rural vendors who are shifting to cities is also a crucial move. Such vendors usually have additional issues, like the absence of documents or poor bank accessibility.

The new scheme will attempt to clear such obstacles and make sure that no vendor is excluded.

Overall, the revised PM SVANidhi is intended to capitalise on its previous success. With additional avenues for loans, digital credit cards, and improved bank access, street vendors can soon find it simpler to access capital and operate businesses with greater stability and assurance.