- By Shreyansh Mangla
- Wed, 24 Sep 2025 05:38 PM (IST)
- Source:JND
PM SVANidhi Scheme: The post-Covid period has been very disruptive for small businesses and vendors. Many street vendors had to suffer the after-effects of Covid-19, including the failure of businesses, loss of money, and loss of livelihoods. To mitigate this, the government launched the PM SVANidhi Scheme, which offers collateral-free micro-loans to street vendors with digital incentives, subsidies, and new rules to boost livelihoods post-Covid.
The PM SVANidhi Scheme (short for Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi) is a central scheme launched in June 2020, to support street vendors who were affected by the Covid-19 pandemic. The scheme offers affordable working capital loans of up to Rs 10,000 to over 5 million street vendors who were operating on or before March 24, 2020.
The loan scheme covers vendors in sectors such as textiles, apparel, artisan products, barbershops, laundry services, and other businesses. The loan aims to help vendors restart their businesses and sustain them in the long run. The scheme was initially launched to run until March 2022.
SIDBI (Small Industries Development Bank of India) is working in collaboration with the scheme managers for its effective implementation.
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PM SVANidhi Scheme Objectives
Provide Affordable Working Capital: The scheme ensures street vendors have access to low-cost loans, enabling them to restart and sustain their livelihood after disruptions such as the COVID-19 lockdown.
Promote Digital Transactions: By rewarding vendors who use digital modes for loan repayment, the scheme encourages financial inclusion and the adoption of digital payment systems.
Encourage Timely Repayment: Vendors who repay loans regularly receive incentives like cash-back and higher loan limits on subsequent borrowings, promoting financial discipline and growth.
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PM SVANidhi Key Features and Benefits
Loan Facility: Street vendors can get a working capital loan of up to Rs 10,000. This loan has no collateral requirement and is repayable in monthly installments over one year. Also, there are no penalties for early repayment.
Interest Subsidy: Vendors who repay their loans on time or earlier receive a 7 percent interest subsidy per year. This subsidy is credited to their bank accounts quarterly.
Credit Limit Escalation: Once a vendor repays their initial loan on time, they become eligible for a higher loan amount of up to Rs 20,000, and later up to Rs 50,000, allowing their businesses to thrive.
Digital Incentives: The scheme encourages digital payments by offering a cashback reward to vendors who use digital transactions.
Capacity Building: The Ministry of Housing and Urban Affairs and State Governments, under this scheme, provide financial literacy and training programs to help vendors manage their finances and improve their digital skills.
Digital Platform: A digital platform, including a web portal and mobile app, is used to manage loan applications, subsidies, and other aspects of the scheme, making the process smoother and more transparent.
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PM SVANidhi Eligibility
The scheme is available to vendors who were operating on or before March 24, 2020. This includes urban, peri-urban, and rural regions of India. Moreover, vendors need to have a bank account and must not have availed another similar government self-employment loan.
Who is involved in the scheme?
The scheme is implemented by ULBs (Urban Local Bodies) and many financial institutions, including Scheduled Commercial Banks, Regional Rural Banks, Microfinance Institutions, and NBFCs (Non-Banking Financial Companies).
The scheme was originally scheduled to run until March 2022 but has been extended until December 2024 to continue supporting street vendors.