NEW DELHI: The Ministry of Urban Affairs has written to lending institutions regarding enhanced loan limits under the Centre’s PM Svanidhi Scheme. It has said that the second tranche of loan should be processed only after the closure of the first one.
The government introduced Pradhan Mantri Street Vendors’ Atma Nirbhar Nidhi Scheme (PM SVANidhi) in June 2020, to offer working capital loans to street vendors. Nearly 24.33 lakh beneficiaries have been received loans under this scheme.
Under new guidelines, on prepayment or repayment, beneficiaries are eligible for an enhanced working capital loan of up to Rs 20,000 and Rs 50,000 in the second and third instalments.
In its communication to the lending institutions, the Ministry of Urban Affairs said “Lending institutions are required to mark the first loan as closed for processing of the second loan.”
The minimum amount of loan for the second tranche has been fixed at Rs 15,000 and it has been decided that the tenure would be up to l8 months.
An interest subsidy of 7% is paid by the ministry on a quarterly basis on timely repayment of loan instalments. The interest above the subsidy is borne by the beneficiaries.
Further, for use of digital transactions, a cashback incentive has been provided under the scheme.
It is Rs 50 for transactions of above Rs 50 per month, Rs 75 for Rs 100 and above and Rs 100 for Rs 200 and above. This amount is electronically transferred to the beneficiary’s account.
If the beneficiary receives 7% interest subsidy and full cashback on digital transactions, his loan becomes without interest.
Therefore, timely repayment and digital transactions to mainstream the street vendors into formal economy has been incentivised.
Street vendors vending in urban areas as on or before March 24, 2020, are eligible for benefit under the PM Svanidhi Scheme.