New Delhi: The Pradhan Mantri Street Vendor’s Atmanirbhar Nidhi- a special micro-credit facility scheme for providing affordable loans to street vendors was launched in New Delhi on Monday.
The scheme aims to benefit over 50 lakh street vendors who have been vending on or before March 24, 2020 in urban areas including those from surrounding peri-urban and rural areas.
The scheme, launched by the Ministry of Housing and Urban Affairs (MoHUA), in pursuance of the announcement made by the Finance Minister recently, is aimed at enabling the street vendors to resume their livelihoods that have been adversely affected due to Covid-19 lockdown.
Officials in the (MoHUA) said that street vendors represent a very important constituent of the urban informal economy and play a significant role in ensuring availability of the goods and services at affordable rates at the door-step of the city dwellers.
The goods supplied by them include vegetables, fruits, ready-to-eat street foods, tea, pakodas, breads, eggs, textiles, apparel, footwear, artisan products, books and stationery etc. The services include barber shops, cobblers, pan shops, laundry services etc. They usually work with a small capital base taken on very high interest rates (sometimes as high as 1 percent per day- amounting to nearly 400 percent per annum) from informal sources, officials said.
“Further, they might have consumed their savings and high cost capital during the lockdown. Therefore, there is an urgent need to provide affordable credit for working capital through formal banking channels to street vendors to help them resume the business,” officials said.
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The duration of the scheme is till March 2022. The street vendors belonging to the surrounding peri-urban and rural areas are being included as beneficiaries under the urban livelihoods programme for the first time.
The vendors can avail a working capital loan of upto Rs 10,000, which is repayable in monthly installments in the tenure of one year. On timely and early repayment of the loan, an interest subsidy of 7 percent per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. There will be no penalty on early repayment of loan.
The scheme provides for escalation of the credit limit on timely and early repayment of loan to help the vendor achieve his ambition of going up on the economic ladder.
In order to ensure fast implementation of the scheme with transparency, accountability and consistency, a digital platform with web portal and mobile app is being developed to administer the scheme with end-to-end solution.
The IT platform will also help in integrating the vendors into the formal financial system. This platform will integrate the web portal and mobile app with Udyamimitra portal of SIDBI for credit management and PAiSA portal of MoHUA to administer interest subsidy automatically.
