street-vendors-to-get-credit-without-collateral

Context: The Ministry of Housing and Urban Affairs (MoHUA) has launched Pradhan Mantri Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi), for providing affordable loans to street vendors.

Pradhan Mantri Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi):

  • The vendors will be able to apply for a working capital loan of up to ₹10,000, which is repayable in monthly instalments within a year. The scheme is valid till March 2022.
  • No collateral: An online portal and mobile application were being developed to ensure speedy implementation of the scheme. 
  • Aims:The Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi Scheme is aimed at benefiting over 50 lakh vendors who had their businesses operational on or before March 24. 
    • The scheme would benefit vendors, hawkers, thelewale and people involved in goods and services related to textiles, apparel, artisan products, barbers shops, laundry services etc. in different areas.
  • Interest subsidy: On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through direct benefit transfer on a six monthly basis.
  • The scheme provides for the rise of the credit limit on timely/ early repayment of loans i.e. if a street vendor repays the installments on time or earlier, he or she can develop his or her credit score that makes him/her eligible for a higher amount of term loan such as Rs. 20,000.
  • MoHUA in collaboration with State Governments will launch a capacity building and financial literacy programme of all the stakeholders and Information, Education and Communication (IEC) activities throughout the country.

Source: https://www.thehindu.com/news/national/coronavirus-lockdown-centre-launches-scheme-for-street-vendors/article31725647.ece

Image Source: Deccan Herald