PM Svanidhi Scheme Application | प्रधानमंत्री स्वनिधि योजना | PM Street Vendor’s Atmanirbhar Nidhi Scheme
Central government of India has launched a new Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) Scheme on 1 June 2020. Under this PM SVANidhi yojana, the Union govt. will provide short term loans upto Rs. 10,000 to rehdi / patri valas (phereewala). This scheme was earlier announced by FM Nirmala Sitharaman in the Rs. 20 lakh crore Atmanirbhar Bharat Abhiyan Package. People needs to apply online at the PM Street Vendor Atmanirbhar Nidhi Scheme official website (to be launched) or can apply offline at banks to avail initial working capital loan.
The main objective of PM Street Vendor’s Aatmanirbhar Nidhi Yojana is to ensure that daily wage earners like vegetable seller, fruits seller earns their livelihood. These short term assistance of Rs. 10,000 will enable small street vendors to restart their work which is badly hit due to Coronavirus (COVID-19) lockdown.
The PM Street Vendor Atmanirbhar Nidhi or PM SVANidhi Scheme will provide initial working capital required to purchase items for selling. Now check the PMSVA scheme guidelines, implementation, reviews by experts and complete details here.
PM SVANidhi Scheme 2020
In order to provide initial working capital loan of upto Rs. 10,000, govt. has started PM Street Vendor Atmanirbhar Nidhi (PM SVANidhi) Scheme 2020. The apply online process for street vendor self reliant scheme is not been specified yet. It is expected that applicants will have to fill either PM SVANidhi online application form or can even take loans by applying offline for Pradhan Mantri Street Vendor Atmanirbhar Nidhi Scheme at banks. Here are the complete details about the PM SVANidhi Scheme launched by Prakash Javadekar on 1 June 2020.
Commercial Banks Will Face Difficulty in Disbursing Loans
Central govt’s recent announcement to offer Rs. 10,000 loans to phereevaala (फेरीवाला) under PMSVA Nidhi scheme will put commercial banks in trouble. It is because commercial banks does not have any past experience in disbursing such small size loans in urban clusters. The new PM Street Vendor Atmanirbhar Scheme 2020 proposes bank credit facility for initial working capital upto Rs. 10,000 for each vendor.
In the nation wide Coronavirus (COVID-19) lockdown, street vendors suffered the most as these people are daily earners. This Rehdi / Patri Wala Loan scheme (रेहड़ी / पटरी वाला लोन योजना) will cover urban as well as rural vendors doing business in the adjoining urban areas. However, mainstream bankers are not excited with extension of such small amount of loans under PM Street Vendor Atmanirbhar Nidhi (PM SVANidhi) Scheme.
Beneficiaries of PM SVANidhi Scheme
As per the initial data collected from state governments, around 50 lakh street vendors would be benefited from PM Street Vendor Atmanirbhar (PM SVANidhi) Scheme. The central govt. will extend a credit flow of Rs. 5,000 crore to this sector. Moreover, those street vendors who makes use of digital payments and timely repayments would be incentivized through monetary rewards.
It is important to mention that only a fraction of those 50 lakh phereevaala may have credit history with commercial banks as banks didn’t had a product designed for this sector. The major objective is to make street vendors self reliant and not fall in debt trap of lenders for such small amount.
Difficulty in Credit Appraisal for Street Vendors Without Credit History
It is of major concern that how to do credit appraisal for an entity without any credit history. As per some of the bankers, self help group model which are followed to extend loans in the rural areas could be followed which is given below:-
A) In this model, a group comprising women borrowers mostly is formed with 10-12 individuals of a neighborhood in a rural area.
B) Here individuals of the group can take responsibility for timely repayment by other members. These groups are required to show savings habit, for at least 6 months, before lending can start.
Problems in Self Help Group (SHG) Model for PM SVANidhi Yojana
The main problem in SHG model for PM Street Vendor Atmanirbhar Nidhi (PM SVANidhi) Yojana is that it may not be feasible to form such a group in urban areas. People of urban areas are apprehensive to be a guarantor of another borrower in the group. Moreover, there is no time to build savings habit as the vendor requires the loan immediately.
Small Finance Banks, MFIs can Disburse Loans Speedily
It is believed that the micro finance institutions (MFIs), and small finance banks who focuses on lending money to urban poor could emerge as the key player to make Street Vendor Loan Scheme a success. SFBs and micro-finance institutions have customers who belong to these community and have expertise in extending small ticket loans.
Key to Implement PM Street Vendor Atmanirbhar Nidhi (PM SVANidhi) Yojana
In order to make Street Loan Vendor Scheme 2020 (दस हज़ार फेरीवाला कर्ज योजना) acceptable for lenders, certain key aspects should be kept in mind:-
Interest Rate – There is need to place an interest cap for such loans which should be linked with the cost of funds. Ideally, it should be linked to the MCLR [marginal cost of funds based lending rate] rather than the government prescribing a particular rate.
Speedy Disbursal – The success of this scheme depends on the speed at which the loan is delivered. For this purpose, govt. will have to keep documentation short and simple. It should be a single page document as the purpose of loan is speed and convenience at which it is delivered. If borrower runs around for a week, then they will lose interest. So, customer delight is one of the key implementation strategy.
Credit Guarantee – Loans under this scheme are likely to be under the Mudra scheme. Mudra loans are guaranteed by Credit Guarantee Trust for Micro And Small Enterprises (CGTMSE). It is not easy to get claims for CGTMSE in case there is a default. Many questions are asked to settle claims as well as loan appraisal report is seen. So in case of NPAs, these loans would incur losses for bankers.
Claim Settlement Criteria – To prevent bankers from loss, CGTMSE should clearly state the claim settlement criteria upfront. A deadline must be specified within which a claim should be paid and if not, then interest should accrue.
It is important that the Street Loan Vendor Scheme 2020 mechanism is effective. The finance ministry is expected to detail the contours of the दस हज़ार फेरीवाला कर्ज योजना in the next few days.