Street vendors to get credit cards, bigger loans

Time of India

30-05-2025

The
PM SVANidhi scheme
is being revamped to provide
street vendors
with higher subsidised loans and credit cards with a limit of Rs 30,000, facilitated by banks, ToI reported on May 30. The revamped scheme, which will soon be presented to the Cabinet for approval, aims to extend subsidised loans to street
vendors
from rural areas migrating to cities.
This initiative builds upon the success of the original scheme launched in 2020, which provided respite from high-interest informal sector loans to over 68 lakh street vendors, ToI's report (by Dipak K Das) said.
The revamped
PM SVANidhi
scheme is set to offer enhanced financial support to street vendors. Banks are coming on board to provide credit cards with a limit of Rs 30,000. These credit cards will be issued to street vendors who have successfully repaid the initial three tranches of subsidised loans, which were Rs 10,000, Rs 20,000, and Rs 50,000.
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The scheme's expansion includes extending subsidised loans to street vendors from rural areas who move to cities for their livelihood. Sources indicate that an additional Rs 10,000 will be included as part of the enhanced loan amount. The credit card facility is designed to provide street vendors with better credit ratings access to more rolling capital for their businesses. The repayment norms for these credit cards will be determined by the banks.
In her Budget speech, FM Nirmala Sitharaman highlighted the impact of the original scheme.
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"Building on this success, the scheme will be revamped with enhanced loans from banks, UPI-linked credit cards with Rs 30,000 limit and capacity building support," she added.
The original PM SVANidhi scheme was launched in 2020 during the Covid-19 pandemic. It aimed to provide financial relief to street vendors who were often reliant on high-interest informal sector loans. The scheme has already benefited more than 68 lakh street vendors.
The revamped scheme seeks to build upon this foundation by offering increased loan amounts and access to formal credit through UPI-linked credit cards. This initiative is expected to provide street vendors with greater financial stability and opportunities for business growth. The involvement of banks in the scheme is crucial for ensuring its effective implementation and outreach.
The provision of credit cards will enable street vendors to manage their working capital more efficiently. The credit card facility will allow street vendors with a better credit rating to have access to more rolling capital for business, with the repayment norms being decided by banks. This access to formal credit can help them reduce their dependence on informal sources of financing, which often come with exorbitant interest rates.
The inclusion of rural street vendors in the revamped scheme is a significant step towards ensuring that the benefits of the program reach a wider population. Street vendors who migrate from rural areas to cities often face unique challenges in accessing financial services. By extending the scheme to this group, the government aims to provide them with the support they need to establish and grow their businesses in urban areas.