PM SVANidhi Scheme: 63 lakh loans given, but to whom?

The scheme intends to provide working capital loans to street vendors, but associations say fraudulent and ineligible beneficiaries are rampant.

In 2021, some street vendors informed Mohit Valecha, Delhi in-charge of the National Hawker Federation (NHF), that officers of the Municipal Corporation of Delhi (MCD) were giving out loan application forms to shopkeepers at Saraswati camp, RK Puram, under the PM SVANidhi scheme. “By the time we reached there, the officers had distributed applications to around 12 of the 20 shopkeepers there. These were junior officers. When we questioned them, they said they did so to meet their targets, and left soon,” says Mohit, who is also All India Youth President of NHF. “I don’t know if the shopkeepers eventually got the loan, but MCD usually approves all applications.”

Mohit says he has found many such instances of inappropriate or fraudulent applications being made under the SVANidhi loan scheme. The Union government had launched the PM SVANidhi (PM Street Vendors’s AtmaNirbhar Nidhi) scheme in June 2020, to provide collateral-free loans to street vendors to help them emerge from the COVID-induced business slump. But councillors and officers of the MCD have distributed applications to random persons, alleges Mohit.

In another incident in 2020, he says, several cycle rickshaw pullers turned up at a camp NHF had organised. “Their ward councillor had set up a camp for the scheme in his own office, and taken their applications to the MCD. They came to our camp to complete the next stage of the loan applications. Only when we told them did they realise that this was a loan, and not free money from the union government as they had been told by the councillor. On knowing this, they left.”

Even as the union government is celebrating the success of the scheme, street vendors’ associations across cities are contesting the actual number of scheme beneficiaries. As per the scheme website, over 63 lakh people have availed the loans.

Vendors’ associations say that the beneficiaries often include construction workers, auto drivers and even homemakers. This could perhaps have been avoided if municipalities followed the scheme guidelines, which required them to set up steering committees that include vendors’ representatives. But most municipalities have ignored this.

Under the SVANidhi scheme, street vendors can avail loans of Rs 10,000 without any collateral, and with interest subsidy up to 7% if they repay instalments on time. If the vendor repays the loan in a timely manner within a year, she will be eligible for another loan of Rs 20,000, and further, upon its repayment, Rs 50,000. 

PM distributes loans to beneficiaries under PM SVANidhi scheme at JLN Stadium, in Delhi on March 14, 2024.
PM distributes loans to beneficiaries under PM SVANidhi scheme at JLN Stadium, in Delhi on March 14, 2024. Pic courtesy: Press Information Bureau, GoI

Vendors’ associations complain that fraudulent applications have become more rampant since late-2022, when municipalities faced mounting pressure to meet MoHUA’s targets.

Cities don’t have clear stats on vendors

As per the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, passed in 2014, every municipality has to survey and register its street vendors every five years, give them ID cards, and hold elections among them. The elected representatives will then make up 40% of the members of the municipality’s Town Vending Committee (TVC). Each municipality should compulsorily have a TVC to ensure vendors’ rights and to allot them individual vending spaces.

Read more: What are the demands of Mumbai’s street vendors?

But even a decade after the law was passed, most cities have not held proper surveys. They have registered only a small fraction of vendors, and the TVCs are largely dysfunctional. In the absence of exact data on street vendors, municipalities can give a Letter of Recommendation (LoR) to loan applicants, after which the application moves to the bank for approval.

While vendors can apply directly on the SVANidhi portal, the Community Resource Persons (CRPs) under the National Urban Livelihoods Mission (NULM) are tasked with helping vendors file applications. Anita Das, General Secretary of the Ranchi Footpath Dukandar Hawkers Sangh, says, “CRPs enrol people arbitrarily so as to meet targets, and also because they get incentives. Ranchi municipality also issued LoRs indiscriminately to meet scheme targets.” 

Nikesh Kumar, Assistant Administrator at Ranchi Municipal Corporation, confirmed that CRPs get an incentive of Rs 100 for filing an application, and another Rs 100 after loan disbursal.

The Sangh currently has 11 members in the city TVC. Ranchi corporation has registered only 6,000-odd vendors based on a 2017 survey, says Anita. Municipal officials, however, say they have forwarded around 19,600 loan applications to banks so far with the LoR, out of which around 13,500 have received loans.

Anita says, “At several camps held in the city, we saw non-vendors applying for the loan. We know cases of construction workers, slum dwellers and even reasonably well-off people getting the loan. Some city councillors also offered loans to their constituents randomly, though the scheme has no provision for involving councillors.”

Anita says TVC members had raised the issue of ineligible beneficiaries in a TVC meeting, but corporation officials merely asked them to approach higher authorities. The municipality has not shared the list of beneficiaries with them despite their request, she adds.

How to avail loans under the PM SVANidhi scheme

  • Applications are accepted online at The vendor’s phone number should be linked to their Aadhaar number.
  • The few vendors who already have a certificate of vending (CoV), based on the municipality’s survey, can directly upload it in their loan application. Since most vendors don’t have a CoV, they first need to apply on the SVANidhi portal for a Letter of Recommendation (LoR). This application goes to the respective municipality.
  • The vendor can track the status of the LoR application online by logging in via the OTP that comes to her phone number.
  • Once the municipality issues the LoR, the vendor can apply on the portal for the Rs 10,000 loan. On the loan application page, the vendor needs to upload the LoR, based on which the application form will get auto-populated. Further, the vendor has to fill in other information such as bank account details and any prior loan details. This application goes to the bank.
  • Though vendors can track the loan application status on the portal, they usually approach banks directly to speed up the process. Otherwise, applications may get rejected or delayed, they say. Some banks also require vendors to sign an affidavit and bring hard copies of documents during their visit. While all banks are included under scheme guidelines, private sector banks have largely avoided loan disbursal.
  • On loan approval, the amount gets credited in the beneficiary’s bank account. 
  • The whole process usually takes only a few days, or in some cases up to 1-2 months, vendors’ associations say.
  • Once a beneficiary finishes repayment of the Rs 10,000 loan, she becomes eligible for loans of Rs 20,000 and Rs 50,000. She can apply for these loans too on the website, or, in some cases the bank pre-approves these loans.

Missing: Steering Committees as suggested in scheme guidelines

As per the PM SVANidhi scheme guidelines, “TVC plays a very important role in identification of beneficiaries”.

The guidelines of the SVANidhi scheme state that each municipality has to set up a steering committee comprised of three TVC members who are vendors’ representatives, along with municipal and banking officials. If the city has no TVC, the municipal commissioner is supposed to nominate three members from the street vendors’ associations in the city. This committee is supposed to “sponsor loan applications and monitor scheme implementation”, and has to meet monthly. 

But hardly any city has set up such a committee.

Nikesh Kumar of Ranchi Municipal Corporation confirmed that the city has no such committee. He said the TVC’s role is limited to creating awareness about the scheme among vendors. “The LoRs are only approved by municipal officials. We get applications from individual vendors, Community Officers who are municipal staff, and CRPs under NULM.”

Delhi municipalities too have no separate steering committees for the scheme, says Mohit Valecha. Mohit and other NHF members are part of various TVCs in Delhi. “Of the 2.25 lakh people who got loans in Delhi, we estimate that only 60-70% would be vendors.”

Mohit Valecha, All India Youth President of the National Hawker Federation, speaking at a meeting of street vendors in Delhi.
Mohit Valecha, All India Youth President of the National Hawker Federation, speaking at a meeting of street vendors in Delhi. Pic courtesy: Mohit Valecha

Discretionary loan disbursal

Babu S, President of the Federation of Bengaluru District Street Vendors Union, says that in Bengaluru, CRPs had taken applications from auto drivers, garment workers, homemakers, etc. “Though Bengaluru has no separate committee for the scheme, the district’s lead bank manager attends the zonal TVC meetings. We had raised this issue in meetings, but the lead bank manager said that the city corporation is the one that approves applications. And corporation officials in turn asked us to speak to NULM. We spoke to NULM officials, but didn’t lodge a formal complaint.”

Vikas Suralkar, Special Commissioner (Welfare) at Bengaluru city corporation, says he is unaware of this issue, and that action can be taken only if vendors file complaints about individual instances. “Else it’s not possible for us to look into every detail of over one lakh applications we have approved so far. Also, the priority of the scheme is to help people, it does not prevent us from helping others [who are not vendors].” 

He says the TVCs’ term in Bengaluru has ended, so they don’t have the mandate anymore. “The re-survey of vendors was supposed to be done in 2022, we will get it done this year.” Vikas was unaware of the provision for a city-level committee to monitor scheme implementation. 

Vendors in Telangana and Guwahati too say they have been excluded from the process. 

Shalivan Ranga, Telangana state president, National Association of Street Vendors of India (NASVI), says he identified many ineligible beneficiaries from Gajularamaram circle, Greater Hyderabad, through a phone survey. Of the 6,000 beneficiaries identified from the circle, many don’t work there at all, says Shalivan who is also a TVC member of the circle.

“Beneficiaries’ data is available online. When I called some of them, I found many were tailors who are self-help group (SHG) members and work out of home. And in many cases, the name or phone number was incorrect,” says Shalivan.

In Guwahati, TVC member Dilip Hazarika says they had questioned the provision of loans to  SHG members under the scheme. “We said they are not street vendors, they rarely participate in some markets and also sell to vendors. But we had to accept the municipality’s decision as all street vendors here are not registered. Only 7,185 vendors were identified in a 2014 survey, but loans have been given to around 27,000 people in Guwahati,” says Dilip.

“Purpose is fulfilled”: MoHUA Joint Secretary

Rahul Kapoor, Joint Secretary at the Ministry of Housing and Urban Affairs and in-charge of PM SVANidhi scheme, says they have no data on which cities have set up the steering committee. “Our goal is not to check if these committees are holding regular meetings. These were supposed to be steering and monitoring committees that facilitate loans; as long as local bodies are issuing LoRs and loans are being sanctioned, that purpose is already being fulfilled.”

However, NASVI head Arbind Singh says that even the city-level committee mentioned in the scheme guidelines is inadequate. “Just three TVC members can’t represent the entire TVC. When the ministry was forming scheme guidelines, we had suggested that loan approvals should be done by the TVCs themselves, because TVCs already have representation of vendors and municipal officials; banker representation could be incorporated into them.”

Rahul Kapoor, MoHUA does acknowledge that vendors’ associations have been raising the issue of ineligible beneficiaries. “But they have not filed formal complaints against specific persons. Without this, taking action is difficult because many poor people do vending alongside other jobs; some may be vendors in certain seasons.”

Kapoor also says that the scheme requirements helped push states to implement the Street Vendors Act, such as in terms of setting up TVCs.  “But there’s still the question of how well TVCs are functioning; eventually this is a state subject.”

Vendors’ associations say the ineligible beneficiaries may not repay the loan, which would in turn impact how street vendors are perceived for future schemes. As per SVANidhi portal, only 40% of beneficiaries (25.7 lakh out of 63.6 lakh) have fully repaid the Rs 10,000 loan. Kapoor says this is because a large proportion of loans were only issued last year, and because the due date was extended for some who couldn’t repay during COVID waves.

Evictions continue

For genuine vendors, the loan approval process was difficult in the first few years, but has eased now. However, enrolment under the scheme doesn’t protect them from eviction or harassment by authorities. Cities continue to routinely evict vendors, often violently, without following any provision of the Street Vendors Act.

Read more: No surveys, no consultations, only eviction: BBMP’s street vendor policy

Arbind Singh says the scheme has helped vendors become part of the mainstream banking system and reduce their dependence on moneylenders, but it doesn’t address the problem of livelihood insecurity. “If a vendor who got the loan is constantly evicted and his wares destroyed, he won’t be able to repay the loan. But no one in the government wants to listen about the non-implementation of the Street Vendors Act.”

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