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PM Swanidhi Scheme

PM Swanidhi Scheme

Why in news?

  • The Ministry of Housing and Urban Affairs has launched PM Svanidhi, or Pradhan Mantri Street Vendor’s Atma Nirbhar Nidhi scheme.
  • The scheme was announced by finance minister Nirmala Sitharaman on 14 May to enable street vendors to resume their livelihoods, which have been hit hard due to the national lockdown.

PM Swanidhi Scheme

  • The Pradhan Mantri Street Vendor’s Atma Nirbhar Nidhi Scheme is aimed at benefiting over 50 lakh vendors who had their businesses operational on or before March 24.
  • The scheme was announced by Finance Minister as a part of the economic package for those affected by the COVID-19 pandemic and lockdown.
  • It is a special micro-credit facility plan.
  • Small Industries Development Bank of India is the technical partner for implementation of this scheme.
  • The loans are meant to help kick-start activity for vendors who have been left without any income since the lockdown was implemented on March 25
  • It will manage the credit guarantee to the lending institutions through Credit Guarantee Fund Trust for Micro and Small Enterprises.
  • The scheme is valid until March 2022.

Loans under the scheme

  • Under the scheme, vendors can avail working capital loan of up to ₹10,000, which is repayable in monthly instalments within one year.
  • 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 (DBT) on six-months basis.
  • There will be no penalty on early repayment of loan.

Expected Beneficiaries  | PM Swanidhi Scheme

  • This loan will be given to those who run shops on the roadside, handcart or streetcar.
  • Fruit-vegetable, laundry, saloon and paan shops are also included in this category.

Special Features Of The Scheme

  • Mobile app and web portal based application process.
  • There will be no guarantee for this loan.
  • Initial loan up to Rs 10,000 for one year on or before loan interest subsidy of 7 on
    half yearly basis.
  • The subsidy will be paid at the time of first loan and in case of early payment, the eligibility of more loan facility for receipt of digital transaction or monthly cashback on payment.

Need For The Scheme

  • The lockdown has affected the lives and livelihoods of many especially daily wagers including street vendors whose businesses were affected due to the restrictions.
  • Street vendors usually work with a small capital base taken on very high interest rates from informal sources. Further, they might have consumed their savings and high cost capital during the lockdown.
  • Therefore, there is an urgent need to provide affordable credit for working capital through formal banking channel to street vendors to help them resume the business.



Indian Economy

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