PM SVANidhi 2.0 on the Horizon: Street Vendors to Get Bigger Loans

In a significant move to empower India’s urban informal sector, the Centre is preparing to roll out PM SVANidhi Scheme 2.0, a revamped version of its earlier flagship scheme launched during the COVID-19 pandemic. According to a report by the Financial Express, the new scheme will offer working capital loans up to ₹50,000 with an interest subsidy of 7% per annum, and also introduce UPI-linked RuPay credit cards with a limit of ₹30,000.

The original Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme was launched in 2020 to help street vendors recover from the economic shock of the pandemic. As of March 31, 2025, over 68 lakh vendors had availed loans worth a total of ₹13,792 crore, the report noted.

The revamped scheme is currently under review by the Expenditure Finance Committee (EFC), chaired by the Expenditure Secretary. As the budgetary allocation exceeds ₹500 crore, the committee’s approval is a prerequisite before launch. The scheme is expected to be co-terminus with the 16th Finance Commission award period, which ends in FY2030-31, as per Financial Express.

From Relief to Resilience

The first phase of the PM SVANidhi Scheme was structured to offer incremental collateral-free loans:

• ₹10,000 in the first cycle,

• ₹20,000 upon successful repayment,

• ₹50,000 in the final tranche.

Apart from the 7% interest subsidy, vendors who adopted digital payments were incentivised with cashbacks of up to ₹1,200 annually. The new version retains this framework but adds the dimension of digital credit access via RuPay cards, further enabling ease of transactions and financial integration.

A Gateway to Formalisation

Beyond immediate financial relief, the scheme aims to formalise India’s vast and often invisible street vending economy. By promoting digital literacy, regular repayments, and credit history, the initiative helps street vendors transition into the formal economy, opening up possibilities for scaling and sustainability.

Street vendors, known locally as thelewala, rehriwala, hawkers, and more, offer essential goods and services ranging from vegetables, pakodas, and tea to tailoring, laundry, and shoe repair. They are a crucial part of India's urban informal workforce, often operating without licenses or structured financial support.

Policy Implications for MSMEs

For stakeholders in the MSME ecosystem, PM SVANidhi 2.0 signals a focused governmental effort on bottom-up economic development. By supporting micro-retail entrepreneurs through digital and credit inclusion, the government is nurturing the next layer of economic growth.

The Financial Express report highlights that this move is expected to spur entrepreneurship, create microfinance opportunities, and improve livelihood resilience at the grassroots.