Street vendors sell vegetables, tea, snacks, flowers and everyday goods in almost every Indian town, but most of them cannot easily get a bank loan. They have no property to offer as security, and many borrow from moneylenders at very high interest. The PM SVANidhi Yojana (Pradhan Mantri Street Vendor’s AatmaNirbhar Nidhi) was created to give them affordable working capital. This guide explains the loan tranches, the interest subsidy, who is eligible, the documents you need and how to apply.
What Is the PM SVANidhi Yojana?
The scheme was launched on 1 June 2020 by the Ministry of Housing and Urban Affairs, after the Covid lockdown hit street vendors hard. Its main idea is to offer a collateral-free working capital loan, to reward timely repayment with a higher loan, and to encourage vendors to use digital payments. The scheme has since been extended, and recent official guidance shows a revised structure of loans.
The Three Loan Tranches
The loan comes in stages. You start with a small amount, repay on time, and then become eligible for a larger one.
- First tranche: up to ₹15,000, repayable over 12 months.
- Second tranche: up to ₹25,000, repayable over 18 months, for vendors who repaid the first loan.
- Third tranche: up to ₹50,000, repayable over 36 months, for vendors who repaid the second loan.
These figures follow the latest guidance of the ministry that was available when this article was prepared. Older guides and some bank pages still show the earlier amounts of ₹10,000, ₹20,000 and ₹50,000, so ask your lender which version applies to you before you plan your borrowing.
Interest Subsidy and Digital Cashback
- Interest subsidy: vendors receive a subsidy of 7% a year on the loan, which is credited to the borrower’s account every quarter. It applies to accounts that are in regular standing under the Reserve Bank’s rules. In practice, this means paying on time.
- Digital cashback: ₹1 is given for each digital transaction, up to ₹100 a month, for up to 12 months for each tranche of the loan.
- No prepayment penalty: in general, you can repay early without a penalty.
- No collateral: you do not have to offer property or a guarantor to get the loan.
Some news reports describe larger cashback amounts. These appear to refer to different categories, such as wholesale purchases, so for an ordinary vendor the ₹100 a month limit is the safe figure to expect.
Who Is Eligible?
- You must be a street vendor who was vending in an urban area on or before the cut-off date set by the scheme.
- You should have a Certificate of Vending or an Identity Card issued by the Urban Local Body (the municipality or corporation).
- Vendors who were left out of the original survey, but who have a Letter of Recommendation from the local body or a town vending committee, can also apply.
- Vendors from the surrounding peri-urban or rural areas who sell in the city may be covered, depending on the rules.
Documents Required
- Aadhaar card, and a mobile number linked to it
- Certificate of Vending, Identity Card or Letter of Recommendation from the urban local body
- Bank account details, with the account in your name
- Voter ID, driving licence or another proof of identity, where asked
- Passport-size photograph
How to Apply Step by Step
- Get your vending certificate. If you do not have a Certificate of Vending or an ID card, ask your municipal office how to get one, or request a Letter of Recommendation.
- Visit the official portal. The scheme runs its own website, pmsvanidhi.mohua.gov.in. You can also apply at a Common Service Centre or at the municipal office, where staff will help you.
- Fill in the form. Enter your Aadhaar-linked mobile number, verify it with an OTP, and complete your details.
- Choose a lender. Banks, small finance banks, cooperative banks, microfinance institutions and some NBFCs take part. Pick one that is near you and easy to reach.
- Verification. The local body checks your details, and the lender then decides about the loan.
- Receive the loan. If approved, the money is credited to your bank account.
- Repay on time and move up. After you repay the first loan, you can apply for the next tranche.
Tips to Get the Most From the Scheme
- Accept digital payments. A QR code from your bank or a payment app is free to set up, and each digital sale earns cashback and builds your credit record.
- Repay on schedule. The interest subsidy and the higher tranches depend on regular repayment.
- Use the money for the business. The loan is meant for stock and working capital, not for personal expenses.
- Keep your documents ready. A name that is spelled differently on Aadhaar and bank records is the most common reason for a delay.
- Do not pay agents. The application is free, and nobody can promise you a loan for a fee.
Frequently Asked Questions
Do I need a shop to apply?
No. The scheme is for street vendors, including those who sell from carts, baskets or temporary stalls.
Is the interest subsidy paid to the bank or to me?
It is credited to the borrower’s account quarterly, according to the scheme guidance.
Can I also take a Mudra loan?
The two schemes have different rules, so ask your lender. You can read our guide to the PM Mudra Yojana to compare them.
Do I need a bank account?
Yes. If you do not have one, see our guide to the PM Jan Dhan Yojana, which explains how to open a zero-balance account.
Final Thoughts
For a street vendor, the PM SVANidhi Yojana can replace expensive informal credit with a low-cost loan that grows as you repay. The path is simple: get your vending certificate, apply through the official portal or the municipal office, repay on time, and use digital payments. Workers outside the vending trade may also want to read about the e-Shram card.
Disclaimer: This article is for general information and is not financial advice or an official government publication. Loan amounts, subsidy rules and cashback limits are revised from time to time. Please confirm the latest details on the official PM SVANidhi portal, with your municipal office or with your lender before you apply. Details last reviewed in November 2026.