PM SVANidhi Scheme – Complete Details
PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Schemes launched to facilitate street vendors to access affordable working capital loan for resuming their livelihoods activities, after easing of lockdown.
The scheme is a Central Sector Scheme i.e. fully funded by Ministry of Housing and Urban Affairs with the following objectives:
(i) To facilitate working capital loan up to Rs. 10,000;
(ii) To incentivize regular repayment; and
(iii) To reward digital transactions
The scheme will help formalize the street vendors with above objectives and will open up new opportunities to this sector to move up the economic ladder.
Eligibility Criteria of Beneficiaries
The Scheme is available to all street vendors engaged in vending in urban areas as on or before March 24, 2020. The eligible vendors will be identified as per following criteria:
(i) Street vendors in possession of Certificate of Vending / Identity Card issued by Urban Local Bodies (ULBs);
(ii) The vendors, who have been identified in the survey but have not been issued Certificate of Vending / Identity Card;
Provisional Certificate of Vending would be generated for such vendors through an IT based Platform. ULBs are encouraged to issue such vendors the permanent Certificate of Vending and Identification Card immediately and positively within a period of one month.
(iii) Street Vendors, left out of the ULBled identification survey or who have started vending after completion of the survey and have been issued Letter of Recommendation (LoR) to that effect by the ULB / Town Vending Committee (TVC); and
(iv) The vendors of surrounding development/peri-urban / rural areas vending in the geographical limits of the ULBs and have been issued Letter of Recommendation (LoR) to that effect by the ULB / TVC.
Brief Details of the Product
Urban street vendors will be eligible to avail a Working Capital (WC) loan of up to Rs.10,000 with tenure of 1 year and repaid in monthly instalments. For this loan, no collateral will be taken by the lending institutions.
On timely or early repayment, the vendors will be eligible for the next cycle of working capital loan with an enhanced limit. No prepayment penalty will be charged from the vendors for repayment before the scheduled date.
Rate of Interest
In case of Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks & SHG Banks, the rates will be as per their prevailing rates of interest.
In case of NBFC, NBFC-MFIs etc., interest rates will be as per RBI guidelines for respective lender category.
In respect of MFIs (non NBFC) & other lender categories not covered under the RBI guidelines, interest rates under the scheme would be applicable as per the extant RBI guidelines for NBFC-MFIs.
Interest Subsidy
The vendors, availing loan under the scheme, are eligible to get an interest subsidy @ 7%.
The interest subsidy amount will be credited into the borrower’s account quarterly. Lenders will submit quarterly claims for interest subsidy for quarters ending as on June 30, September 30, December 31 and March 31 during each financial year. Subsidy will only be considered in respect of accounts of borrowers, which are Standard (non-NPA as per extant RBI guidelines) on respective claim dates and only for those months during which the account has remained Standard in the concerned quarter.
The interest subsidy is available up to March 31, 2022. The subsidy will be available on first and subsequent enhanced loans up to that date.
In case of early payment, the admissible amount of subsidy will be credited in one go.
Promotion of Digital Transactions by Vendors
The scheme will incentivize digital transactions by vendors through cash back facility. The transaction trail so created will build the credit score of vendors for enhancing their future credit needs. The network of lending institutions and digital payment aggregators like NPCI (for BHIM), PayTM, GooglePay, BharatPay, AmazonPay, PhonePe etc. will be used to on-board the street vendors for digital transactions. The onboarded vendors would be incentivised with a monthly cashback in
the range of Rs.50 – Rs.100 as per the following criteria:
(i) On executing 50 eligible transactions in a month: Rs.50;
(ii) On executing the next 50 additional eligible transactions in a month: Rs.25 (i.e on reaching 100 eligible transactions, the vendor to receive Rs.75); and
(iii) On executing the next additional 100 or more eligible transactions: Rs.25 (i.e on reaching 200 eligible transactions, the vendor to receive Rs.100).
Here eligible transactions mean a digital payout or receipt with minimum value of Rs.25.
Who can lend
Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs) & SHG Banks established in some States/UTs e.g. Stree Nidhi etc. The lending institutions will be encouraged to use their network of field functionaries i.e. Business Correspondents (BCs) / Constituents/ Agents extensively to ensure maximum coverage of the scheme.
States of Andhra Pradesh and Telangana do not have presence of MFIs. However, they have a robust network of SHGs and their Federations which may be utilised to complement the efforts of SCBs/ RRBs/ SFBs/NBFCs and Cooperative Banks in mobilizing and generating loan applications for Street
Vendors. For this, these States may devise a suitable incentive mechanism for the SHGs.
Credit Guarantee
The Scheme has a provision of Graded Guarantee Cover for the loans sanctioned, as indicated below, to be administered by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which will be operated on portfolio basis:
a) First Loss Default (Up to 5%): 100%
b) Second Loss (beyond 5% up to 15%): 75% of default portfolio
c) Maximum guarantee coverage will be 15% of the year portfolio.
All loans given by each lending institution under the scheme will be considered for coverage under the guarantee. The periodicity of filing of claims by lending institutions will be quarterly.
All the participating lending institutions shall be eligible to avail this guarantee cover without any charges.
Further, a representative of MoHUA shall be a special invitee at the meetings of the Board of trustees of CGTMSE whenever the Scheme is taken up for consideration.
For more details please visit the official web portal.
Click here to download the Guidelines issued by the Government.