The Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, launched by the Ministry of Housing and Urban Affairs (MoHUA) in June 2020, is a central-sector micro-credit initiative designed to provide financial support to street vendors adversely affected by the COVID-19 pandemic. This Article delves into the specifics of the ₹50,000 loan under this scheme, focusing on eligibility, application process, loan details, required documents, and other important aspects, ensuring a thorough understanding for street vendors seeking to leverage this opportunity.

Background and Purpose

The PM SVANidhi scheme aims to facilitate working capital loans to street vendors, helping them resume and expand their livelihoods. It is fully funded by MoHUA and focuses on formalizing the street vending sector, promoting digital transactions, and providing economic upliftment. The scheme offers loans in three tranches: an initial loan of up to ₹10,000, a second loan of up to ₹20,000 after timely repayment of the first, and a third loan of up to ₹50,000 after repaying the second loan on time. This note specifically addresses the ₹50,000 loan, which is crucial for vendors looking to scale their businesses.

Eligibility Criteria for PM SVANidhi Loan of ₹50,000

To be eligible for the ₹50,000 loan, a street vendor must meet the following criteria:

Must have been vending in urban areas as of or before March 24, 2020.
Must possess a Certificate of Vending or Identity Card issued by Urban Local Bodies (ULBs), or have been identified in the ULB survey with a provisional certificate if not issued an identity card.
Must have successfully repaid the first loan of ₹10,000 and the second loan of ₹20,000 under the scheme on time, demonstrating creditworthiness.

The scheme is available for beneficiaries from states/UTs that have notified rules under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, with exceptions for Meghalaya, which has its state act.

Loan Details for PM SVANidhi Loan of ₹50,000

The ₹50,000 loan is the third tranche under the PM SVANidhi scheme, designed to provide significant working capital for business expansion. Key details include:

Loan Amount: Up to ₹50,000, collateral-free, facilitating access without asset-based security.
Interest Rate: The interest rate is determined by the lending institution, such as scheduled commercial banks, regional rural banks, small finance banks, cooperative banks, or NBFCs, based on their prevailing rates or RBI guidelines for respective categories. A 7% interest subsidy is provided for prompt repayment, credited quarterly into the borrower’s account, reducing the effective interest rate for compliant borrowers.
Repayment Terms: Repayment is typically in monthly installments, with the tenure extending beyond the initial 12 months for the first loan, though exact terms may vary by lender. For instance, Bank of Baroda specifies a maximum tenure of 18 months for the second tranche, suggesting a similar or extended period for the third.
Security: No collateral is required, with a graded guarantee cover administered by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) on a portfolio basis, ensuring lender protection without burdening the vendor.

An interesting aspect is the variability in interest rates, which depend on the lender. For example, Bank of Baroda links its rate to the Baroda Repo Linked Lending Rate (BRLLR) plus a spread, currently around 8.90% for MSME loans as of February 10, 2025, with the 7% subsidy potentially reducing the effective rate to 1.90% for prompt payers, though this varies by bank and loan size.

Application Process for PM SVANidhi Loan of ₹50,000

Applying for the ₹50,000 loan involves several steps, ensuring a streamlined process for eligible vendors:

Ensure Eligibility: Confirm that you have repaid the previous two loans on time and meet the criteria, including possession of a vending certificate and engagement in urban vending before March 24, 2020.
Register on the PM SVANidhi Portal: Visit the official website (PM SVANidhi) and register with personal details, contact information, and vendor-related data. If already registered for previous loans, log in with existing credentials.
Apply for the Third Tranche Loan: Navigate to the loan application section on the portal, select the third tranche option for up to ₹50,000, and fill out the application form, providing details of previous loan repayments.
Provide Required Documents: Upload the necessary documents, which may include proof of identity (Aadhaar card, PAN card), proof of address (utility bill, bank statement), vending certificate or identity card from ULB, bank account details, and proof of repayment of previous loans (receipts or bank statements).
Wait for Approval: The lender will review the application, verify documents, and assess credit history, particularly the timely repayment of previous loans, before approving the loan.
Disbursement: Upon approval, the loan amount will be disbursed directly to the vendor’s bank account, enabling immediate use for business needs.

Vendors can also apply through Common Service Centres (CSCs) nearby for assistance, especially if facing digital access challenges.

Documents Required for PM SVANidhi Loan of ₹50,000

The following documents are typically required for the ₹50,000 loan application, though lenders may request additional specifics:

Proof of identity: Aadhaar card, PAN card (if applicable), voter ID, or other government-issued ID.
Proof of address: Utility bill, bank statement, or rental agreement.
Vending certificate or identity card issued by the ULB, or a provisional certificate if identified in the survey but not issued a card.
Bank account details, including a cancelled cheque or bank statement, for loan disbursement.
Proof of repayment of previous loans, such as bank statements or receipts, to demonstrate creditworthiness.

These documents ensure compliance with KYC norms and scheme guidelines, facilitating a smooth application process.

Other Important Points for PM SVANidhi Loan of ₹50,000

Several additional features and benefits enhance the attractiveness of the ₹50,000 loan under PM SVANidhi:

Interest Subsidy: A 7% interest subsidy is available for prompt repayment, credited quarterly, reducing the financial burden and encouraging timely payments. This subsidy is crucial for vendors, especially given the variable interest rates set by lenders.
Cashback Incentive: Vendors using digital transactions for repayments or business are eligible for a cashback of up to ₹100 per month, promoting financial inclusion and digital adoption. This incentive, detailed on the official portal, can amount to ₹1,200 annually, providing additional savings.
Repayment Structure: Loans are repaid in monthly installments, with flexibility in tenure depending on the lender, ensuring manageable cash flow for vendors. The absence of collateral reduces risk, making it accessible for those without significant assets.
No Processing Fees: Many lenders, such as Bank of Baroda, do not charge processing fees for PM SVANidhi loans, further reducing costs for applicants.
Credit Guarantee: The scheme includes a graded guarantee cover by CGTMSE, operated on a portfolio basis, with no guarantee fee payable by vendors or banks, enhancing lender confidence and loan accessibility.

An unexpected detail is the scheme’s focus on digital transactions, with cashback incentives not only reducing loan costs but also aligning with broader government efforts to promote a cashless economy, potentially transforming vendor business practices.

Conclusion

The PM SVANidhi scheme’s third tranche loan of up to ₹50,000 offers street vendors a significant opportunity to expand their businesses, supported by collateral-free financing, interest subsidies, and digital incentives. By understanding the eligibility criteria, loan details, application process, and required documents, vendors can effectively utilize this scheme to achieve financial stability and growth. This comprehensive guide ensures vendors are well-equipped to navigate the process, leveraging government support to thrive in the urban informal economy.