UPSC Articles
Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi)
Part of: Prelims and GS II – Government schemes and policies
Context: The Cabinet has approved the continuation of lending under the Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) beyond March 2022 till December 2024, with focus on
- Enhanced collateral-free affordable loan corpus
- Increased adoption of digital transactions
- Holistic socio-economic development of the Street Vendors and their families.
What is the scheme all about?
- It 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.
- The Scheme had envisaged to facilitate loans for an amount of Rs. 5,000 crore. Today’s approval has increased the loan amount to Rs. 8,100 crore, thereby providing the Street vendors working capital to further expand their business and making them AtmaNirbhar.
Why was this scheme rolled out?
- To deal with Impact of Pandemic & Lockdown: The COVID-19 pandemic and the nationwide lockdown disrupted the business cycle and left daily wage workers & street vendors out of work. The scheme aims at aiding the vendors at getting back on their feet financially.
- Establishing Credit Score & Digital Record: 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.
- Prevents Debt Trap: 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 helps prevent street vendors from falling into debt trap.
- Formalisation of Economy: 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.
