PM SVANidhi Scheme: Empowering Urban Street Vendors

In August 2025, the Union Cabinet approved a major extension and revamp of PM SVANidhi. The scheme now runs till March 2030 with ₹7,332 crore outlay, enhanced loan limits (₹15,000, ₹25,000, ₹50,000), and wider coverage, including census towns and peri-urban areas.

• Relevant for UPSC Prelims & Current Affairs.
• Relevant for Mains GS Paper II & III (welfare schemes for vulnerable sections, financial inclusion, urban poverty alleviation, and digital economy).
• Important for Essay and Interview discussions.

The Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme was launched on June 1, 2020, to help street vendors recover from the COVID-19 lockdown by giving them easy working-capital loans.

• It offers small, collateral-free loans (initially ₹10,000, now up to ₹15,000) on very soft terms, plus rewards for timely repayment and digital transactions.

In simple terms, PM SVANidhi is a government credit program that aims to revive the businesses of urban vendors, promote cashless payments, and bring informal sellers into the formal economy.

The scheme aims to empower street vendors both financially and socially.

• Revive Businesses: Provide small loans to street vendors affected by COVID-19 to help them restart and continue their work.
• Formalise Vendors: Link vendors to banks and Aadhaar to build credit history and financial identity.
• Promote Digital Payments: Encourage UPI/QR code use through cashback rewards for transparent and efficient business.
• Socio-economic Uplift: Support the incomes of women and marginalised vendors, making them more self-reliant.
• Capacity Building: Train vendors in business, digital literacy, and food safety, and connect them to welfare schemes via SVANidhi se Samriddhi fairs.

Must read: Prime Minister Dhan-Dhaanya Krishi Yojana

Core features include loan structure, subsidies, and digital incentives. 

• Loans in Tranches: Collateral-free loans up to ₹50,000 in three cycles (₹10k → ₹20k → ₹50k); post-2025 this was revised to ₹15k → ₹25k → ₹50k for the first two cycles.
• Interest Subsidy: 7% per annum subsidy on timely repayment of loans.
• Digital Cashback: Monthly cashback on digital payments (originally ₹100/month, max ₹1,200/yr) now enhanced (up to ₹1,600/yr under restructured scheme).
• Faster Cycles: Completing one loan on time unlocks a higher next loan (loan-limit escalation for on-time repayment).
• Quick Repayment Friendly: No penalty on early repayment (helps vendors finish loans and become eligible for the next cycle faster).

Who can apply for the PM SVANidhi Scheme: 

• Vendor Status: Must be an urban (or peri-urban) street vendor operating on or before 24 March 2020.
• Documentation: Should have a ULB-issued vending certificate/identity card (if already surveyed).
• Late Joiners: Vendors identified in post-lockdown surveys–or those in peri-urban/rural areas selling within cities–can apply with a Letter of Recommendation (LoR) from the local ULB/TVC.

The scheme is rolled out through a government-financial partnership model:

• Joint Management: MoHUA (Ministry of Housing & Urban Affairs) leads the scheme in partnership with the Department of Financial Services (DFS).
• Nodal Agency: SIDBI manages the scheme via the Udyamimitra portal, working with banks, NBFCs, and MFIs for loan disbursal.
• Local Outreach: Town Vending Committees/ULBs identify vendors, issue certificates/LoRs, and run loan camps (e.g., Jaipur’s Model Vending Zones).
• Digital Process: Vendors apply online or via banks, with loans approved quickly and credited directly to accounts.

Even with good progress, the scheme faces some hurdles that limit its full impact. Here’s how: 

• Awareness & Documents: Many vendors lack knowledge of the scheme or valid ID proofs, leading to low enrollment (PIB).
• Bank Reluctance: Private banks were hesitant—by Mar 2022, only ~2% of loans came from them (PIB).
• Digital Gap: Not all vendors use smartphones/UPI, reducing cashback benefits.
• Coverage Limits: Vendors without survey registration (cut-off Mar 2020) often miss out.
• Loan Size: Even revised loan amounts may be too small for bigger needs.

Also read: Namo Drone Didi Scheme

PM SVANidhi has directly touched the lives of street vendors and strengthened the informal economy:

• Scale of Support: 96 lakh loans worth ₹13,797 crore disbursed to 68 lakh vendors (till July 2025).
• Digitalisation: 47 lakh vendors made 557 crore digital transactions worth ₹6.09 lakh crore, earning ₹241 crore cashback.
• Formal Recognition: Vendors gained bank accounts, credit history, and recognition as part of the formal economy.
• Awards: Won PM’s Award for Excellence (2023) and Silver Award for Innovation (2022) for digital and inclusive impact.

Beyond credit, PM SVANidhi has helped bring street vendors into India’s formal financial system:

• Banking access: Many vendors opened bank accounts for the first time through this scheme.
• Digital adoption: Cashback incentives encouraged the use of UPI/QR codes for daily transactions.
• Credit history: Loan repayments are reported to credit bureaus, helping vendors build credit scores for future loans.
• Additional credit: Vendors repaying the 2nd loan get a UPI-linked RuPay credit card for instant short-term credit.

PM SVANidhi has brought hundreds of thousands of low-income vendors from the informal shadows into the formal financial fabric of the country.

The PM SVANidhi scheme has already supported millions, but it can be made more practical and people-friendly with some simple steps:

• Make applying easier: Set up one-stop help desks in markets, reduce paperwork, and ensure loans are approved faster.
• Reach more vendors: Use posters, loudspeakers, and mobile loan officers to spread awareness, especially in small towns.
• Teach digital skills: Organise weekend UPI/QR training in local languages and promote buddy systems between young and older vendors.
• Improve market facilities: Provide clean toilets, water, storage, and safe vending zones so vendors can work with dignity.
• Strengthen support: Create helplines, link loans with family welfare schemes, and ensure protection from harassment.

The real success of PM SVANidhi lies not only in giving loans, but in giving vendors respect, security, and a fair chance to grow.

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