Government receives 2.6 lakh applications for loans under PM-SVANidhi Scheme so far

While noting that the Ministry of Housing and Urban Affairs is working on a complete IT solution including mobile application for seamless implementation of the scheme, Prime Minister said that the scheme design should incentive use of end-to-end digital transactions by the street vendors.

This should cover the entire gamut of their business – from procurement of raw material to the collection of sale proceeds. Appropriate incentives and training should be conducted for this purpose. The use of digital payments would also help build a credit profile for the street vendor helping them in future financial needs, he said.

The Union Cabinet on June 1 had cleared the credit scheme for street vendors so that they can revive their businesses without any further delay. The scheme is a special micro-credit facility scheme to enable more than 50 lakh urban/peri-urban and rural street vendors who were vending on or before March 24, 2020, to restart their livelihoods affected due to the lockdown.

Incentives in the form of interest subsidy (@ 7 percent per annum) and cashback (upto Rs 1,200 per annum) are being provided to promote good repayment behaviour and digital transactions respectively. The interest subsidy effectively works out to 30 percent of the entire interest burden for a loan of Rs 10,000 @ 24 percent annual interest.

“Therefore, in effect the vendor does not pay any interest, rather gets a subsidy on the loan amount if he repays in time and uses digital transactions for all receipts and payments. The scheme entails enhanced next tranche of loan on early or timely repayment,” the release added.

Loan processing has begun since July 02, 2020 through an IT platform “PM SVANidhi” with Small Industries Development Bank of India (SIDBI), which is the implementing agency for the scheme administration.

Prime Minister Modi said that the scheme should also be seen as a part of an outreach to the street vendors for their holistic development and economic upliftment.

“One step in this direction would be by capturing their entire socio-economic details to facilitate necessary policy interventions.  Such data could also be used by different Ministries of Government of India to benefit them under various Schemes for which they are eligible, on priority. These include housing under PMAY-U, cooking gas under Ujjawala, electricity under Saubhagya, health under Ayushman Bharat, skilling under DAY-NULM, Bank account under Jan Dhan etc,” the PMO statement said.