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What is the PM SVANidhi scheme for street vendors, and why was it launched?

The Editorial covers GS paper 2 [Government policies and interventions for development in various sectors and issues arising out of their design and implementation.]

Government loan scheme for street vendors gets Bollywood boost on social  media - The Hindu


  • The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, which was launched in June amid the pandemic, is a micro-credit facility that provides street vendors a collateral-free loan of Rs 10,000 with low rates of interest for a period of one year.

  • So far, the scheme – part of the AtmaNirbhar Bharat package – has received 31,64,367 applications from across the country (except from Sikkim, which is officially not taking part in it). 

  • Of the total applications, 16,77,027 have been sanctioned and 12,17,507 have been disbursed.

Why was this scheme rolled out?

  • The COVID-19 pandemic and the nationwide lockdown left daily wage workers and street vendors out of work. 

  • The scheme aims at aiding the vendors at getting back on their feet financially. 

  • In the long term, it aims at establishing a credit score for the vendors as well as creating a digital record of their socio-economic status, so that they can avail the Central government schemes later. 

  • The scheme also attempts to formalise the informal sector of the economy and provide them safety nets and a means of availing loans in the future.

  • Many vendors belong to what we call the informal economy, and often borrow from private lenders which charge them exorbitant rates of interest. 

  • This loan charges below 12% rate of interest, and creates a credit score of the vendors, so that if they repay the loan on time, they can avail more. 

  • Moreover, by creating a digital record of them and their socio-economic profile, it will help them avail various other 8-9 central government schemes which provide a form of a safety net, helping in their poverty alleviation.

Which vendors are eligible for the loan, and how do they apply for it?


  • All vendors who have been vending from or before March 24, 2020 and with a certificate of vending can avail the loan.

  • As per the Street Vendors Act of 2014, the Town Vending Committees (which comprises the local authorities and vendors from an area) issue a certificate of vending after a survey has been conducted of all the vendors.

  • But since many states and cities have not conducted the survey yet, many vendors are unable to provide any such certificate of vending. 

  • Instead, as per the scheme, the urban local bodies – in this case, the municipalities – shall provide a Letter of Recommendation for every vendor who wishes to avail the loan.

  • These documents, including the identification proof, are uploaded on a special portal made for the scheme, and the loans are sanctioned by banks and disbursed, ideally, in 10-15 days.

What are the various challenges that vendors are facing while applying for the loan?


  • Even though the scheme has received a tremendous response from vendors across the country, certain areas lag others when it comes to its implementation due to various factors.

  • States across the country have unevenly implemented the Street Vendors Act of 2014, which necessitates a survey of the vendors to provide them with a certificate of vending.

  • One of the major challenges witnessed in Delhi, which has a track record of unfair evictions of vendors and has not yet conducted a city-wide survey of vendors as per the rules notified by the Delhi government in 2016, is the lack of a certificate of vending. 

  • Due to this, the vendors must first apply for a Letter of Recommendation (LORs) from the ULBs, which tends to not only delay the entire process, but can also lead to the application being rejected.

  • A second issue was that mobile numbers of various vendors were not linked with their Aadhar cards. 

  • To address this, various ULBs have now set up camps. 

  • Many vendor associations are also setting up camps at markets to rectify this issue and also help the vendors in the online application process.


Currently, Hyderabad has seen the highest number of applications (over 50,000) and disbursement rates. Bengaluru, Mumbai, Chennai, Delhi and Kolkata are ranked next in that order. West Bengal has only now notified the scheme.

Telangana, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh are among the better performing states, which have also provided certificates of vending either before the pandemic or in the past few months.

Source: Indian Express.