PM SVANidhi scheme

Context

Recently, SBI analysed the PM SVANidhi scheme's impact on street vendors.

Background

1. The Modi government's microcredit PM SVANidhi plan for street sellers has been commended by an SBI research paper for promoting inclusive entrepreneurship.
2. According to recent sources, 44% of OBC recipients of the PM SVANidhi plan are from the non-general category, making up 75% of the scheme's beneficiaries.
3. According to the research, women make up 43% of the overall beneficiaries of PM Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) initiative, with Scheduled Castes and Scheduled Tribes accounting for 22% of all disbursements.
4. SVANidhi has been tagged as a gender equalizer by the SBI research, which stated that the female share implies empowerment of entrepreneurial capacities of urban girls.

About PM SVANidhi scheme

1. PM SVANidhi scheme Launched in 2020.
2. Ministry: Ministry of Housing & Urban Affairs.
3. Implementation agency: Small Industries Development Bank of India (SIDBI).
4. Objective: Enabling vendors on the streets who have suffered because of the COVID-19 lockdown to resume their livelihoods by offering them reasonable Working Capital loans.
5. The scheme aims to provide working capital loans to about 50 lakh street vendors with no collateral needed and a one-year term of up to INR 10,000.
6. It is a Central Sector Scheme.
7. Central sector schemes: programs carried out by the Central Government apparatus and fully financed by the Central Government.
8. Duration of the scheme: Originally, the scheme was to run until March 2022.

Extension of the scheme

1. It is now valid till December 2024.
2. This was carried out with an emphasis on the comprehensive socio-economic development of the street vendors and their families, heightened use of digital transactions, and improved collateral-free, affordable loan corpus.
3. A third loan with a maximum amount of ₹50,000 was added to the first and second loans, which had limits of ₹10,000 and ₹20,000, respectively.

Features of the scheme

1. Loan limit: Up to Rs. 10,000 in working capital loans are available to vendors.
2. For a period of one-year, monthly installments are required to be paid back on this loan.
3. Because there is no collateral needed to apply for the loan, street sellers can get it more easily.
4. Processing fee: Street vendors can apply for the scheme at no cost because there is no processing fee.
5. Loan repayment period: one year.
6. Interest subsidy: an interest subsidy at the rate of 7% annually upon timely or early loan return.
7. Through Direct Benefit Transfers, it will be credited to beneficiaries' bank accounts on a quarterly basis.
8. Early repayment: No penalty on early repayment of the loan.
9. Additional benefits: The vendors can avail of the facility of escalation of the credit limit on timely/ early repayment of a loan.
10. Credit limit: the maximum amount of credit a financial institution extends to a client on a credit card or a line of credit.

Target beneficiaries under the scheme

1. Street vendors are the intended beneficiaries of this scheme.
2. Any person involved in selling items, goods, wares, or food items on a street, footpath, or pavement, or while moving from one location to another is referred to as a vendor in the scheme's standards.
3. Goods supplied: fruits, vegetables, ready-to-eat street food, tea, pakodas, apparel, artisan products, books/ stationary etc.
4. Services provided: cobblers, barber shops, pan shops, laundry services etc.

Advantages of the scheme

1. The scheme encourages online purchases by offering cash-back incentives up to Rs. 100 each month.
2. The scheme promotes entrepreneurship.
3. Additionally, it promotes employment opportunities. (PM SVANidhi's Socio-Economic Profiling Program started).

   Must Check: Best IAS Coaching In Delhi