Focus: GS-II Social Justice, Prelims
Why in news?
- The Centre on 1st June 2020 launched PM SVANidhi, a scheme to offer micro-credit up to ₹10,000 at affordable interest rates to street vendors hit by the nationwide lockdown.
- It was initially announced by finance minister Nirmala Sitharaman on 14 May.
- PM SVANidhi, short for Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi, will help street vendors resume their businesses, impacted due to the nationwide lockdown.
- Vendors can avail of a working capital loan of up to ₹10,000, which is repayable in monthly instalments over one year.
- On timely, or early repayment, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer every six months.
- There will be no penalty for early repayment of loans.
Who will be Benefitted by this scheme?
- Five million street vendors who were operating on or before 24 March are expected to benefit from the scheme, which will be available till March 2022.
- The scheme is applicable to vendors, hawkers, thelewalas, rehriwalas, and theliphadwalas supplying goods and services.
- Street vendors in peri-urban or rural areas will also be able to avail the benefits.
Implementation of PM SVANidhi
- Urban local bodies will be playing a pivotal role in the implementation of the scheme as the lending institutions under the scheme include, Regional Rural Banks, Scheduled Commercial Banks, Cooperative Banks, Small Finance Banks, Micro Finance Institutions, NBFCs, and Self-Help Groups.
- It is the first time that NBFCs/MFIs/SHG Banks have been allowed in a scheme for urban poor. The change is because of their ground-level presence and proximity to the urban poor including the street vendors.
- Also, for the fast implementation of the scheme for transparency, a digital platform with a mobile app and web portal has also been developed to administer the scheme with end to end solutions. This platform will also help in integrating the vendors in a formal financial system.
- The scheme will also incentivise digital transactions by the street vendors through monthly cashback.