What Is PM SVANidhi scheme?

Empowering Street Vendors: The Impact of the PM SVANidhi Scheme

Street vendors are an integral part of India’s informal economy, contributing significantly to urban livelihoods. From selling vegetables and fruits to household goods and food items, they cater to the daily needs of millions of citizens. Commonly referred to as fariyas, laari walas, or street hawkers, these micro-entrepreneurs often face financial insecurity, lack of institutional support, and are vulnerable to economic shocks. Recognizing their crucial role and the hardships faced during the COVID-19 pandemic, the Government of India launched a transformative initiative: the Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme.

The Genesis of PM SVANidhi

Launched on June 1, 2020, under the Ministry of Housing and Urban Affairs, PM SVANidhi was conceptualized as part of the AtmaNirbhar Bharat Abhiyan (Self-Reliant India Movement). The primary objective was to provide collateral-free working capital loans to street vendors to help them restart their businesses that were affected by the nationwide lockdown.

This scheme marks a landmark step in the formal recognition and financial inclusion of street vendors, who have traditionally operated outside the purview of government welfare schemes.

Core Objectives of the Scheme

PM SVANidhi aims to achieve the following goals:

  1. Financial Inclusion: Provide microcredit to vendors for restarting their businesses.
  2. Encourage Digital Transactions: Promote cashless payments by offering incentives.
  3. Establish Credit History: Create a credit record for future access to formal banking services.
  4. Empower Local Economies: Support grassroots entrepreneurship to boost the local economy.

Key Features of PM SVANidhi

1. Collateral-Free Working Capital Loan

The scheme offers a collateral-free initial loan of up to ₹10,000 with a repayment period of one year. This helps vendors purchase stock, repair their carts, or resume operations without approaching informal moneylenders.

2. Progressive Lending

To reward timely repayment, the scheme offers second and third loans:

  • ₹20,000 after timely repayment of the first loan.
  • ₹50,000 after timely repayment of the second loan.

This escalated lending system encourages financial discipline and builds long-term creditworthiness.

3. Interest Subsidy

A 7% interest subsidy is credited directly to the vendor’s account quarterly. This makes the loan effectively cheaper and more accessible compared to informal sources of credit, where interest rates are often exploitative.

4. Digital Transaction Incentives

To promote digital literacy and transparent business practices, the scheme offers cashback incentives up to ₹100 per month for vendors using digital payment platforms like UPI, PayTM, PhonePe, or BharatPe.

5. Credit Score Building

Each timely repayment contributes to the vendor’s credit profile, helping them access other government schemes or larger financial products in the future.

Eligibility Criteria

PM SVANidhi is designed to be inclusive. Eligible applicants include:

  • Vendors with a Certificate of Vending or an Identity Card issued by Urban Local Bodies (ULBs).
  • Vendors identified in municipal surveys but yet to receive formal documentation.
  • Vendors not included in surveys or who started after the cut-off date (March 24, 2020) but can secure a Letter of Recommendation from their ULB or Town Vending Committee.

This broad criterion ensures that most fariyas and laari walas can benefit, regardless of whether they have formal registration.

Application Process

Applying for the PM SVANidhi scheme is simple and accessible:

  1. Online Application: Vendors can apply directly through the PM SVANidhi Portal.
  2. Common Service Centres (CSCs): Assistance is available at local CSCs, especially in rural and semi-urban areas.
  3. Municipal Offices/ULBs: Street vendors can visit local bodies for verification and document submission.

Applicants are required to furnish basic documents like an Aadhaar card, bank account details, and proof of vending or a recommendation letter.

Implementation and Progress

Since its inception, PM SVANidhi has seen remarkable success:

  • As of early 2025, over 50 lakh applications have been received.
  • More than 35 lakh loans have been disbursed.
  • Thousands of vendors have successfully taken second and third loans.
  • Many beneficiaries have transitioned to digital payments, thus embracing financial transparency and efficiency.

States like Uttar Pradesh, Madhya Pradesh, Gujarat, and Maharashtra have shown excellent implementation, owing to proactive local governance and vendor mobilization campaigns.

Impact on Fariyas and Laari Walas

The PM SVANidhi scheme has been a game-changer for street vendors across India. Here’s how:

  • Restored Livelihoods: Many vendors who lost their income during the pandemic have restarted operations.
  • Reduced Dependence on Moneylenders: The easy, formal loan has replaced high-interest informal borrowing.
  • Empowerment Through Formal Economy: Vendors now possess credit history and can access other financial services.
  • Boost in Daily Sales: With better inventory and improved carts, many vendors report an increase in daily profits.
  • Digital Inclusion: Even older vendors have embraced UPI and QR codes, enhancing ease and safety for both seller and customer.

Success Stories

Take the example of Sita Devi, a vegetable vendor in Varanasi. She used the ₹10,000 loan to restock her cart after the pandemic and began using digital payment apps. Within a year, she repaid the loan and received a second loan of ₹20,000. Now, her son helps her maintain digital records and plans to expand their business to a nearby locality.

Similarly, in Ahmedabad, 65-year-old Ramjibhai, who sells snacks from a laari, was able to repair his cart and install an umbrella and lights using the loan. With his business now running in the evenings too, his earnings have doubled.

Challenges and Way Forward

While the scheme is widely appreciated, it faces certain challenges:

  • Awareness Gap: Some vendors, especially in rural or remote areas, are unaware of the scheme or lack guidance on how to apply.
  • Documentation Issues: Street vendors without vending certificates face delays in getting recommendations.
  • Technical Literacy: Elderly or less-educated vendors struggle with digital applications and transactions.

To address these issues, the government can enhance outreach through community radio, NGO partnerships, mobile kiosks, and more training camps for digital tools.

Conclusion

The PM SVANidhi scheme represents a visionary step towards building an inclusive and self-reliant India. By financially empowering street vendors, it not only safeguards their livelihood but also integrates them into the formal economy. For fariyas and laari walas, it’s more than just a loan—it’s a recognition of their resilience and a promise of a better, secure future.

As India moves towards a digital, inclusive economy, supporting grassroots entrepreneurs through such innovative schemes will be key to ensuring sustainable urban livelihoods and economic justice.

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