The Informal Economy and Street Vendors
Credit, Debt and PM SVANidhi
Vendors often borrow from moneylenders at high rates, and the PM SVANidhi scheme offers small working-capital loans with incentives for digital payments.
Vendors need cash each morning to buy stock.
Daily borrowing
Many take loans from informal lenders and repay daily at very high interest.
The scheme
The PM SVANidhi scheme, launched in 2020, offers collateral-free working capital loans, with larger loans for those who repay on time.
Digital incentives
Cashback encourages digital payments, creating a record of transactions.
Limits
Vendors may still struggle with paperwork and access.
A fruit seller borrows in the morning to buy stock and repays with interest by evening.
Sales, location and costs also matter.
- Vendors often use costly informal credit.
- SVANidhi gives small loans.
- Digital payments build records.
- Access challenges remain.
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