The Pradhan Mantri Svanidhi Yojana (PM Svanidhi Yojana), launched in 2020 to support businesses impacted by the COVID-19 pandemic, enables small traders and street vendors to secure a loan using only their Aadhaar card, without the need for a guarantee.
How PM Svanidhi Yojana Works
Under the PM Svanidhi Yojana, eligible traders are initially offered a loan of up to ₹10,000. If they repay the loan on time, they become eligible for a ₹20,000 loan in the next cycle. Further timely repayment can increase the loan amount to ₹50,000.
The loan is to be repaid in installments within a 12-month period.
How to Apply for PM Svanidhi Yojana
Traders can apply for the PM Svanidhi scheme at a government bank using their Aadhaar card, which is a mandatory requirement.
Steps to Apply:
- Gather Required Documents: Collect all the necessary documents for the Loan Application Form (LAF).
- Link Mobile Number to Aadhaar: Ensure your mobile number is linked to your Aadhaar, as it is required for e-KYC/Aadhaar validation during the online application process.
- Borrowers must obtain a letter of recommendation from urban local bodies (ULB) to be eligible for future benefits from similar government welfare schemes.
- Check Eligibility: The scheme has four categories of vendors who are eligible to receive the loan.
- After completing these steps, you can begin the application process directly on the portal or through a nearby Common Service Centre (CSC).
Interest Rate
The interest rates for scheduled commercial banks, regional rural banks (RRBs), small finance banks (SFBs), and cooperative banks will follow the prevailing rates currently in effect.
For NBFCs, NBFC-MFIs, and similar institutions, the interest rates will be determined according to the RBI guidelines specific to each lender category.
For MFIs (non-NBFC) and other lender categories not covered by RBI guidelines, the interest rates will align with the existing RBI guidelines for NBFC-MFIs.
Source: Hindustan Times
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