PM SVANidhi Scheme Restructuring and Key Features

PM SVANidhi Scheme Restructuring and Key Features

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Key takeaways

  • The Cabinet extended the PM SVANidhi scheme until 31st March 2030, setting a target to reach 1.15 crore street vendors.
  • The scheme offers micro-loans in three progressive tranches of Rs 15,000, Rs 25,000, and Rs 50,000 without requiring collateral.
  • Beneficiaries receive an annual interest subsidy of 7% per annum via DBT and digital transaction cashbacks up to Rs 100 per month.
  • Through 'SVANidhi se Samriddhi', vendor families gain access to 8 major central government welfare programs.

Why in News

  • The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme has completed 1 year of its restructured phase.
  • The scheme has expanded its focus beyond basic working capital loans to cover formal finance, digital inclusion, social security, capacity building, and entrepreneurship.

Key Facts About PM SVANidhi

  • The Ministry of Housing and Urban Affairs (MoHUA) launched PM SVANidhi in June 2020 during the Covid-19 pandemic.
  • It provides collateral-free working-capital loans to help urban street vendors shift from informal money lenders to the formal banking system.
  • The Union Cabinet approved the restructured scheme in August 2025, extending the lending period until 31st March 2030.
  • This extension aims to cover 1.15 crore street vendors, including 50 lakh new beneficiaries.
  • The scheme operates as a 100% centrally funded Central Sector Scheme under MoHUA.
  • Eligible beneficiaries include urban, peri-urban, and rural street vendors, hawkers, and informal service providers like barbers and cobblers operating in Urban Local Bodies (ULBs).
  • The first loan tranche offers collateral-free credit up to Rs 15,000 with a 12-month repayment tenure.
  • The second tranche provides loans up to Rs 25,000 with an 18-month tenure after timely repayment of the first loan.
  • The third tranche offers enhanced credit up to Rs 50,000 with a 36-month tenure and no prepayment penalty.
  • Standard bank accounts receive an interest subsidy of 7% per annum credited quarterly through Direct Benefit Transfer (DBT).
  • Vendors earn a monthly digital transaction cashback up to Rs 100 to encourage cashless payments.
  • Vendors completing the second loan tranche become eligible for a UPI-Linked RuPay Credit Card with a initial limit of Rs 10,000 up to Rs 30,000 for 5 years.
  • An end-to-end Digital Lending Platform (DLP) automates loan application, verification, approval, and disbursement processes.
  • The Vendor Migration Module allows smooth transfer of Letters of Recommendation (LoRs) when vendors move between ULBs and Census Towns.
  • The City Region Approach brings vendors from Census Towns into the formal financial framework.
  • Eligibility requires a Certificate of Vending or Identity Card issued by ULBs, or a verified LoR from the Town Vending Committee (TVC).
  • The MoHUA launched 'SVANidhi se Samriddhi' to map the socio-economic status of vendor families and connect them to 8 central welfare schemes.
  • Key schemes under this integration include PMJJBY, PMSBY, PM Jan Dhan Yojana, BoCW, PM Shram Yogi Maandhan, ONORC, Janani Suraksha Yojana, and PMMVY.
  • During the first year of restructuring, institutions disbursed 21.86 lakh loans worth Rs 6,294 crore to 10.56 lakh new beneficiaries.
  • Since inception, 78.68 lakh vendors have received more than 1.18 crore loans through PM SVANidhi.
  • The PM SVANidhi Startup Challenge promotes solutions for market access, financial tools, and logistics for vendors.
  • The government provides up to Rs 4 crore each for 50 Street Food Hubs and an extra Rs 25 lakh for vending zones.
  • Events like Lok Kalyan Melas connect vendors with banks, while over 6 lakh food vendors have received safety training from FSSAI.

Frequently Asked Questions

  • What is PM SVANidhi? It is a Central Sector Scheme launched on 1 June 2020 by MoHUA to offer collateral-free loans to street vendors.
  • What are the loan tranches under PM SVANidhi? The scheme offers sequential loans of Rs 15,000, Rs 25,000, and Rs 50,000 based on timely repayment.
  • What is SVANidhi se Samriddhi? It conducts socio-economic profiling of vendors' families to link them with 8 central government welfare schemes.
  • How does the scheme promote digital inclusion? It offers monthly cashback on digital transactions and provides a UPI-linked RuPay Credit Card with limits up to Rs 30,000.
  • What is the focus of the restructured scheme? The updated scheme extends lending to 31 March 2030 targeting 1.15 crore vendors with a focus on credit, entrepreneurship, and social security.