Small Loans, Big Change: How PM Svanidhi Powering India’s Street Economy

Small Loans, Big Change: How PM Svanidhi Powering India’s Street Economy

New Delhi: When the COVID-19 pandemic changed daily life in 2020, India’s street vendors were among the worst affected due to the lockdown.

It was during this period that the PM Street Vendor’s Atmanirbhar Nidhi (PM Svanidhi) scheme came as a critical lifeline. Designed to offer not freebies but financial empowerment, it provided small, collateral-free loans that helped millions of street vendors in India to restart their livelihoods and gradually enter the formal financial system.

Also Read:- India News: PM Narendra Modi launches PM-SETU Scheme to empower India’s Youth with world’s skill demands

PM Svanidhi was launched in mid-2020. The scheme offered street vendors working capital loans of ₹10,000, followed by higher limits of ₹20,000 and ₹50,000 for those maintaining timely repayment.

Borrowers also received a 7% interest subsidy and cashback incentives for adopting digital repayments, encouraging both financial discipline and digital inclusion.

Over the years, the impact has been noted positively by the Union Government. Nearly 70 lakh street vendors have benefited from the initiative. A 2023 study found that most vendors used their loans to restock goods, repair equipment, or expand operations.

Newer data shows that 40% of these borrowers went on to access formal bank loans, often three to four times larger than their initial SVANidhi credit, marking a transition from survival to sustained growth.

Unlike many government welfare schemes, PM SVANidhi avoided unconditional subsidies. Its incentives—linked to prompt repayments and digital payments—helped strengthen the entire credit ecosystem.