Interest Rate of PM SVANidhi Loan for ₹50,000

The PM SVANidhi scheme, launched by the Government of India, is designed to provide affordable and accessible loans to street vendors who have been impacted by the COVID-19 pandemic. This scheme aims to help vendors revive their businesses by providing financial support. One of the key aspects of the scheme is the interest rate applied to the loans.

For a loan amount of ₹50,000 under the PM SVANidhi scheme, the interest rate is set at 7% per annum. This rate is quite competitive, especially when compared to other small business loans available in the market. The government has subsidized the interest rate to make it more affordable for street vendors.

Additionally, if the borrower repays the loan promptly and adheres to the repayment schedule, they may benefit from an interest subvention of up to 3% per annum. This effectively reduces the interest burden on the borrower, making the scheme even more attractive.

Key Points:

• Interest Rate: 7% per annum.
• Interest Subvention: Up to 3% per annum for prompt repayment.
• Loan Amount: ₹50,000.

This subsidized rate is part of the government's effort to provide relief and support to street vendors who are crucial to the local economy but have faced financial hardships due to the pandemic.

Further Analysis:

• Comparison with Market Rates: The average interest rate for small business loans typically ranges from 12% to 18% per annum. The PM SVANidhi scheme offers a significantly lower rate, demonstrating the government's commitment to supporting small-scale businesses.
• Impact on Vendors: Lower interest rates mean reduced financial strain on vendors, allowing them to reinvest more into their businesses rather than spending a large portion of their earnings on interest payments.

Repayment Details:

• Loan Tenure: The loan is generally repaid in monthly installments over a period of one year.
• Repayment Schedule: Vendors are required to follow a strict repayment schedule to be eligible for the interest subvention.

Conclusion: The PM SVANidhi scheme provides an essential financial lifeline for street vendors, helping them recover and grow their businesses. The low-interest rate and additional benefits like the interest subvention make it an attractive option for those who qualify.