As a part of Prime Minister Street Vendor’s AtmaNibhar Nidhi (PM SVANidhi) Scheme, Ministry of Housing & Urban Affairs (MoHUA) has entered into an MoU with Swiggy, the leading food ordering and delivery platform in India, to onboard street food vendors on its ecommerce platform, giving them online access to thousands of consumers and help these vendors grow their businesses.

Objective

To radically transform the business of Street Vendors across cities, by facilitating them to receive orders and serve customers using online mode of business.

During the ongoing COVID-19 pandemic where physical distancing is the key to check it’s spread, in this novel initiative MoHUA has coordinated with the key stakeholders including Municipal Corporations, fssai, Swiggy and GST officials to ensure that necessary prerequisites are completed for this initiative.

Salient Features

    • MoHUA and Swiggy will run a pilot program by on-boarding 250 vendors across five cities namely – Ahmadabad, Chennai, Delhi, Indore, and Varanasi.

    • The street vendors will be helped with PAN and FSSAI registration, training on technology/ partner app usage, menu digitization and pricing, hygiene and packaging best practices.

    • Upon the successful completion of the pilot, MoHUA and Swiggy plan to expand this initiative across the country in phases.

    • Idea is to empower street vendors with digital technology and facilitate greater income earning opportunities by being present on a popular ecommerce platform like Swiggy.

About PM SVANidhi Scheme

PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) was launched by Ministry of Housing & Urban Affairs under the ambit of ‘AtmaNirbhar Bharat Abhiyan’ on 1st June 2020. The Scheme envisages bringing ‘Banks at the door steps’ of these ‘nano-entrepreneurs’ by engaging the Non-Banking Financial Companies (NBFCs) and the Micro-Finance Institutions (MFIs) as lending institutions in addition to Scheduled Commercial Banks - Public & Private, Regional Rural Banks, Cooperative Banks, SHG Banks etc. It has generated considerable enthusiasm among the street vendors, who have been looking for access to affordable working capital credit for re-starting their businesses post COVID-19 lockdown. Also the onboarding of the vendors on digital payment platforms is a very important component to build the credit profile of the vendors to help them become part of the formal urban economy.

Objective

    • To facilitate working capital loan up to Rs. 10,000

    • To incentivize regular repayment

    • To reward digital transactions

Salient Features

    • The scheme is a Central Sector Scheme i.e. fully funded by Ministry of Housing and Urban Affairs.

    • It is available for beneficiaries belonging to only those States/UTs which have notified Rules and Scheme under Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014 and to all street vendors engaged in vending in urban areas as on or before March 24, 2020.

    • Urban street vendors will be eligible to avail a Working Capital (WC) loan of up to Rs 10,000 with tenure of 1 year and repaid in monthly instalments. For this loan, no collateral will be taken by the lending institutions.

    • On timely or early repayment, the vendors will be eligible for the next cycle of working capital loan with an enhanced limit.

    • No prepayment penalty will be charged from the vendors for repayment before the scheduled date.

    • Rate of interests will be the prevailing rates of Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks & SHG Banks.

    • The vendors, availing loan under the scheme, are eligible to get an interest subsidy @ 7%. The interest subsidy amount will be credited into the borrower’s account quarterly.

    • The scheme will incentivize digital transactions by vendors through cash back facility.  The transaction trail so created will build the credit score of vendors for enhancing their future credit needs. 

    • The onboarded vendors would be incentivized with a monthly cashback in the range of Rs.50 - Rs.100 depending on the number of eligible transactions.

    • Lending institutions can be Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Cooperative Banks, Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs) & SHG Banks.

    • The Scheme has a provision of Graded Guarantee Cover for the loans sanctioned.

    • Small Industries Development Bank of India (SIDBI) will be the implementation partner of the Ministry of Housing and Urban Affairs for scheme administration.

    • As on October 4, 2020, over 20 lakh loan applications have been received under the PM SVANidhi Scheme. Out of these over 7.5 lakh loans have been sanctioned and over 2.4 lakh loans disbursed.

(The author is a trainer for Civil Services aspirants. The views expressed here are personal.)