The PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) scheme, which was launched in June amid the pandemic, is a micro-credit facility that provides street vendors a collateral-free loan of Rs 10,000 with low rates of interest for a period of one year.
So far, the scheme – part of the AtmaNirbhar Bharat package – has received 31,64,367 applications from across the country (except from Sikkim, which is officially not taking part in it). Of the total applications, 16,77,027 have been sanctioned and 12,17,507 have been disbursed.
Why was this scheme rolled out?
The COVID-19 pandemic and the nationwide lockdown left daily wage workers and street vendors out of work. The scheme aims at aiding the vendors at getting back on their feet financially. In the long term, it aims at establishing a credit score for the vendors as well as creating a digital record of their socio-economic status, so that they can avail the Central government schemes later. The scheme also attempts to formalise the informal sector of the economy and provide them safety nets and a means of availing loans in the future.
“Many vendors belong to what we call the informal economy, and often borrow from private lenders which charge them exorbitant rates of interest. This loan charges below 12% rate of interest, and creates a credit score of the vendors, so that if they repay the loan on time, they can avail more. Moreover, by creating a digital record of them and their socio-economic profile, it will help them avail various other 8-9 central government schemes which provide a form of a safety net, helping in their poverty alleviation,” said Sanjay Kumar, Joint Secretary in Union Ministry of Housing and Urban Affairs.
Which vendors are eligible for the loan, and how do they apply for it?
All vendors who have been vending from or before March 24, 2020 and with a certificate of vending can avail the loan.
As per the Street Vendors Act of 2014, the Town Vending Committees (which comprises the local authorities and vendors from an area) issue a certificate of vending after a survey has been conducted of all the vendors.
But since many states and cities have not conducted the survey yet, many vendors are unable to provide any such certificate of vending. Instead, as per the scheme, the urban local bodies – in this case, the municipalities – shall provide a Letter of Recommendation for every vendor who wishes to avail the loan.
“Survey is not required for this scheme. The ULBs can issue an LOR, or if the vendor is a member of a vendor association, he or she can apply,” said Kumar. Requirements for an LOR vary, with many ULBs asking for any proof of vending, including even a photo of a vendor at the spot.
These documents, including the identification proof, are uploaded on a special portal made for the scheme, and the loans are sanctioned by banks and disbursed, ideally, in 10-15 days.
What are the various challenges that vendors are facing while applying for the loan?
Even though the scheme has received a tremendous response from vendors across the country, certain areas lag others when it comes to its implementation due to various factors.
States across the country have unevenly implemented the Street Vendors Act of 2014, which necessitates a survey of the vendors to provide them with a certificate of vending.
One of the major challenges witnessed in Delhi, which has a track record of unfair evictions of vendors and has not yet conducted a city-wide survey of vendors as per the rules notified by the Delhi government in 2016, is the lack of a certificate of vending. Due to this, the vendors must first apply for a Letter of Recommendation (LORs) from the ULBs, which tends to not only delay the entire process, but can also lead to the application being rejected.
Some municipalities are also slow in issuing LORs, which has kept hundreds of vendors waiting for the loan for months. “The progress across the ULBs of various areas is uneven, for example, the New Delhi Municipal Council is terribly slow in issuing LORs,” said Kumar.
LOR applications also tend to be rejected. Prem Pal (47), a vendor in Kamala Nagar in Delhi said that his application for an LOR got denied a few times, and that he had to seek help from a member of a vendor association to get his loan cleared. He said, “I applied a few times, and finally the bank where I applied processed my application after I sought some help and provided all the documents necessary.”
A second issue was that mobile numbers of various vendors were not linked with their Aadhar cards. To address this, various ULBs have now set up camps. Many vendor associations are also setting up camps at markets to rectify this issue and also help the vendors in the online application process.
Another issue, Kumar said, is the mindset of local authorities against vendors.
In Delhi, various vendors who have received the loans are often evicted from their place by either the police or by the ULB officials, hitting their only source of income and their ability to repay the loan. For example, Kanhaiya (48), a vendor at Rohini in Delhi said that he has been unable to set up his stall outside a temple as the ULB officials and the temple authorities have not allowed it since the lockdown.
Does the scheme legitimise vending of the applicants if the city has not conducted a Town Vending Committee survey as per the Act?
“Once an LOR is issued by the ULBs, its mandate lasts a month, after which the survey for the issuance of the certificate of vending should be undertaken by the ULBs. But since it is a state subject, the central government can only direct or sensitise the state governments on the importance of doing so, and not evicting vendors who have availed the loan but do not have a certificate,” said Kumar.
Rajesh Goyal, deputy commissioner of Karol Bagh zone, which falls under the North Delhi Municipal Corporation said, “The LORs issued by the ULB do not give any legal authorisation or rights for vending, as this is not mentioned by the scheme.”
How do metropolitan cities and states rank when it comes to the implementation of the scheme?
“Currently, Hyderabad has seen the highest number of applications (over 50,000) and disbursement rates. Bengaluru, Mumbai, Chennai, Delhi and Kolkata are ranked next in that order,” said Kumar. “West Bengal has only now notified the scheme,” he added.
Telangana, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh are among the better performing states, which have also provided certificates of vending either before the pandemic or in the past few months, said Kumar. “We have received over 40,000 applications from Agra, which beats even a large city like Delhi.”