Manohar Lal
Urbanization in India is advancing rapidly. It is estimated that by 2050, nearly 50% of the country's population will reside in urban areas. At present, approximately 66% of the urban workforce is engaged in the informal sector, which forms a vital pillar of the urban economy. Among those working in this sector, street vendors play a particularly significant role. Millions of vendors selling fruits, vegetables, tea, snacks, clothing, and other daily-use items not only make life easier for citizens but also contribute substantially to the urban economy.
Despite their importance, street vendors historically had limited access to formal banking and credit facilities. In the absence of a credit history, they often relied on informal sources of finance at high interest rates, resulting in a significant portion of their income being spent on loan repayments. The COVID-19 pandemic in 2020 further exacerbated their challenges, severely impacting their businesses.
In response to these unprecedented difficulties, the Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme was launched in June 2020 under the visionary leadership of Prime Minister Narendra Modi. It is India's first comprehensive micro-credit scheme for street vendors, providing them with simple, dignified, and institutional access to formal finance for the first time.
Under the scheme, banks and financial institutions provide collateral-free working capital loans in three tranches of Rs 15,000, Rs 25,000, and Rs 50,000. To encourage timely repayment, beneficiaries who timely repay their loans receive an interest subsidy of 7%. Over the past six years, the PM SVANidhi Scheme has benefitted nearly 76 lakh street vendors and facilitated the disbursement of loans exceeding Rs 17,800 crore across its three lending cycles.
Indian street vendors are known for their resilience and perseverance amid changing global circumstances and economic disruptions. PM SVANidhi has infused new energy into their entrepreneurial spirit. The scheme has gone beyond merely providing loans; it has become a powerful vehicle for dignity, recognition, and new opportunities.
A key factor behind the scheme's success has been the “Whole-of-Government Approach,” which brought together coordinated efforts of the Central Government, State Governments, Urban Local Bodies, and banking institutions. This collaborative framework has enabled the scheme to achieve unprecedented outreach and remarkable outcomes across the country.
Under this scheme, the bank accounts of millions of street vendors became active, their financial transactions began to be recorded, and for the first time, a formal credit history was established for them. This made it easier for them to access larger loans and other financial services in the future, and today they have emerged as respected bank customers and entrepreneurs.
Another significant aspect of the scheme is digital empowerment. Cashback incentives have been introduced to promote UPI and QR code-based digital payments. Through this initiative, over 55 lakh vendors have been integrated into the digital economy, making their transactions more transparent and strengthening their financial credibility.
The scheme’s vision extends beyond business support. Through the SVANidhi se Samriddhi initiative, beneficiaries and their families are connected to eight major welfare schemes of the Government of India. More than 50 lakh street vendor families have been profiled so far, and over 1.52 crore benefits have been sanctioned under these schemes. By facilitating access to pensions, insurance, healthcare, and social security benefits, the initiative has emerged as a comprehensive social protection mechanism for street vendors and their families.
In addition, collaboration with the Food Safety and Standards Authority of India (FSSAI) has enabled the provision of training on food safety and hygiene. This has particularly benefited street food vendors by improving quality standards, hygiene practices, and customer confidence.
The scheme has also made a noteworthy contribution to women’s empowerment. Women constitute nearly 46% of all beneficiaries. As a result, their income levels, social standing, and participation in household decision-making have significantly improved.
Independent impact assessments conducted in 2023 and 2025 have further validated the scheme’s far-reaching impact. Approximately 95% of beneficiaries accessed formal credit for the first time in their lives, marking a historic achievement in financial inclusion. Moreover, nearly 30% of beneficiaries subsequently succeeded in obtaining loans from other formal financial institutions, reflecting growing financial confidence and stronger credit profiles.
Beneficiaries have reported an average annual increase of nearly 20% in income. Improvements have also been observed in housing conditions, nutrition, healthcare access, and children's education. Between 2023 and 2025, the use of UPI-based transactions among beneficiaries increased significantly from approximately 45% to 83%.
Recognizing the scheme’s broad and positive impact, the Union Cabinet, in August 2025, approved its extension in a restructured form until March 2030.
Under the revamped scheme, loan limits for street vendors have been enhanced, and the scope has been expanded beyond Urban Local Bodies to include Census Towns and peri-urban areas. Greater emphasis is also being placed on capacity building to help vendors strengthen and adapt their enterprises to evolving economic needs. In this direction, the introduction of the SVANidhi Credit Card marks another important step. The card provides vendors with access to short-term, interest-free credit to meet immediate financial and personal requirements.
While PM SVANidhi has significantly advanced the financial empowerment of street vendors, many of them are still not adequately recognized as an integral part of urban planning frameworks. They continue to face challenges such as the lack of designated vending spaces. The absence of organized vending zones affects both their livelihoods and customer accessibility. To address this challenge, State Governments and Urban Local Bodies should work toward integrating street vendors into urban planning framework in the coming years. One promising initiative in this regard is the development of Street Food Hubs, which will provide vendors with organized and accessible business spaces. Such efforts will not only strengthen their livelihoods but also contribute to cleaner, more organized, and more vibrant urban environments.
The PM SVANidhi Scheme embodies the vision of Atmanirbhar Bharat and Vocal for Local at the grassroots level. Its success demonstrates that the benefits of inclusive development are reaching the most vulnerable sections of society.
The scheme has established an effective model of financial inclusion and social security for street vendors. It is expected that in the years ahead, PM SVANidhi will continue to empower millions of vendors, create new stories of transformation, and play a significant role in building a viksit Bharat.
(The Author is Union Minister for Housing and Urban Affairs)
