PM SVANidhi

PM SVANidhi was launched on 1 June 2020 as a direct response to the COVID-19 lockdown, which wiped out the daily working capital of approximately 50 lakh street vendors in urban India. Most of these vendors operate on roll-over credit from informal lenders at effective rates of 200 percent or more per annum. A typical vegetable seller borrows Rs 1,000 in the morning, returns Rs 1,100 in the evening; that is roughly 36 percent monthly.

SVANidhi was designed to break this cycle with formal credit at 8 to 9 percent, collateral-free, accessed through a simple app or CSC. The scheme has since funded over 80 lakh loans worth Rs 13,000 crore as of 2025, with roughly 70 percent on-time repayment rate. That repayment rate is remarkable for a vulnerable population product.

The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014, defines a street vendor as any person engaged in vending of articles, goods, wares, food items or merchandise of everyday use to the general public in a street, lane, sidewalk, footpath, pavement, public park or any other public place.

This includes stationary vendors (a vegetable stall on a sidewalk), mobile vendors (a chaiwala with a cart) and weekly haat vendors. It also includes service vendors such as cobblers, knife-grinders, ear-cleaners and barbers operating from public spaces.

The 2014 Act required urban local bodies to survey and issue Certificates of Vending. Many ULBs did this incompletely. To address gaps, SVANidhi accepts a Letter of Recommendation (LoR) from the ULB or Town Vending Committee for unregistered vendors. This LoR is the single most important document if you do not have a vending certificate.

If you do not have a vending certificate, visit your ULB office or the SVANidhi help desk at the municipal corporation. Submit a one-page application stating your name, address, vending location, type of goods sold and duration of vending (must be on or before 24 March 2020).

The ULB has 15 days to issue the LoR. In practice, it takes anywhere from a week to 45 days. If you are denied or ignored, the recourse is to approach the Town Vending Committee (TVC), which is required to include representatives of street vendor associations. Many cities have an active SEWA, NASVI or AIVA federation that helps vendors get LoRs.

The LoR is valid for one year and can be renewed. It also serves as proof of livelihood for other welfare schemes, so it is worth obtaining even if you do not immediately apply for SVANidhi.

First tranche: Rs 10,000, repayable in 12 equal monthly instalments of approximately Rs 870 (principal plus interest at 8 to 9 percent reducing balance). On full repayment within 12 months, the second tranche of Rs 20,000 is auto-eligible, repayable in 18 monthly instalments. On full repayment of the second tranche, the third tranche of Rs 50,000 is eligible, repayable in 36 monthly instalments.

Each tranche must be fully repaid before the next is sanctioned. Banks check repayment status through the SVANidhi MIS automatically. There is no separate application required for subsequent tranches; you can ask your bank to process the next loan as soon as the previous one closes.

Borrowers who default on a tranche become ineligible for subsequent tranches and lose the interest subvention on the defaulted loan. The default also reflects on CIBIL, which closes the door on other formal credit for at least three years.

The headline interest rate is 8 to 9 percent (varies by bank), but the government provides a 7 percent interest subvention for borrowers who repay on time. This subvention is paid quarterly by direct benefit transfer into the borrower's bank account.

Effectively, an on-time borrower's net cost is roughly 1 to 2 percent per annum. For a Rs 10,000 loan over 12 months, that is approximately Rs 100 to Rs 200 in net interest. This is the cheapest formal credit available to any borrower in India today.

The catch is the on-time condition. A single missed instalment in a quarter forfeits that quarter's subvention. Two consecutive missed instalments triggers loan-level penalty interest. Set up auto-debit; do not rely on monthly reminders.

SVANidhi pays Re 1 per UPI transaction up to a maximum of 100 transactions per month, that is Rs 100 monthly cashback. The intent is to nudge vendors to accept digital payments, build a transaction record and qualify for larger formal credit later.

The trap is that some vendors split single sales into multiple UPI requests (asking the customer to pay Rs 20 twice instead of Rs 40 once) to inflate transaction count. The system detects this through merchant analytics; repeated artificial splitting can lead to disqualification and recovery of paid incentives.

Use UPI naturally. The incentive matters less than the transaction history. Vendors who consistently accept UPI for 18 to 24 months become eligible for MUDRA loans of Rs 1 lakh to Rs 5 lakh on the back of that digital footprint, which is the actual long-term prize.

Download the SVANidhi app from the Play Store. Register with your mobile number (must be Aadhaar-linked). Upload your vending certificate or LoR, Aadhaar and bank passbook photograph. Select your preferred lending bank.

The bank's branch contacts you within 5 to 7 days, usually by phone, to verify details and complete final KYC. Sanction is within 30 days of complete application. Disbursement is to your bank account, typically within 7 days of sanction.

If you do not have a smartphone, the CSC route works the same way. The CSC charges no fee for SVANidhi enrolment.

ULB survey omission. Many vendors were genuinely vending before 2020 but were missed in the ULB survey. Fix: obtain LoR through TVC route.

Bank account not Aadhaar-seeded. Fix: visit bank branch with Aadhaar and request seeding. Seeding through customer service phone is unreliable; insist on branch confirmation.

Bank declining despite eligibility. Fix: SVANidhi is mandatory for participating banks; report decline to the ULB nodal officer or the helpline. Most resolved cases come from this escalation route.

Mobile number mismatch. Fix: update mobile number on Aadhaar before applying, since OTP authentication is at multiple stages.

GovRays editors verified this section against the latest scheme circulars and field reporting from beneficiary households, and we re-audit every paragraph each quarter to keep the working detail accurate. If a rule below changes after publication, the updated date at the top of this guide will reflect it within seven working days, and any material change is summarised in the Editor's note appended to the relevant section so returning readers can identify what is new without re-reading the entire article.

GovRays editors verified this section against the latest scheme circulars and field reporting from beneficiary households, and we re-audit every paragraph each quarter to keep the working detail accurate. If a rule below changes after publication, the updated date at the top of this guide will reflect it within seven working days, and any material change is summarised in the Editor's note appended to the relevant section so returning readers can identify what is new without re-reading the entire article.

GovRays editors verified this section against the latest scheme circulars and field reporting from beneficiary households, and we re-audit every paragraph each quarter to keep the working detail accurate. If a rule below changes after publication, the updated date at the top of this guide will reflect it within seven working days, and any material change is summarised in the Editor's note appended to the relevant section so returning readers can identify what is new without re-reading the entire article.

• 01Street vendor in any urban or peri-urban area, including weekly markets
• 02Holds a Certificate of Vending or identity card from urban local body
• 03Vendors without ID can apply through a Letter of Recommendation from ULB or town vending committee
• 04All-India coverage including vendors from rural areas selling in urban or peri-urban locations

• §Aadhaar
• §Bank account passbook
• §Certificate of Vending or Letter of Recommendation
• §Mobile number linked to Aadhaar

• No vending certificate and no LoR obtained from ULB
• Bank account not Aadhaar-seeded
• Vendor not listed in 2020 ULB street vendor survey
• Previous SVANidhi tranche in default

• PM SVANidhi scheme operational guidelines, 2024, Ministry of Housing and Urban Affairslink ↗
• Street Vendors Act, 2014, Government of Indialink ↗
• SVANidhi MIS dashboard, Ministry of Housing and Urban Affairs