National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme

1. Individual Handloom Weaver/Weaver Entrepreneur- Margin Money assistance @20% of the loan amount, subject to a maximum of ₹25,000/-.
2. Handloom organization - Margin money assistance @20% of the loan amount, subject to a maximum of ₹20.00 lakh (margin money @₹2.00 lakhs for every 100 weaver/worker). Additional margin money requirement, if any as per banking norms will be borne by the beneficiary Agency.
3. Margin money assistance to Primary Handloom Weavers’ Co-operative Societies/Apex Handloom Weavers’ Co-operative Societies/State Handloom Corporations will be provided on the recommendation of the State Director of Handlooms.

1. Subsidized loans at a concessional interest rate of 6% for a period of three years will be available to eligible handloom organizations only. However, this is subject to interest subvention cap only upto 7% by the GoI.
2. Interest subvention as applicable will be provided a maximum of 3 years from the date of the first disbursal.

1. The loans extended to the eligible handloom organizations will be guaranteed by the National Credit Guarantee Trustee Company (NCGTC)/Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE), as per the decision of the Bank/Financial Institution concerned. Guarantee cover will be effective from the date of disbursement of the loan for 3 years.
2. If the loan amount sanctioned is ₹1.00 crore, the handloom organization is eligible for getting maximum margin money assistance of ₹20.00 lakhs (margin money @₹2.00 lakhs for every handloom weaver/worker). Therefore, a credit guarantee would be covered on the loan amount disbursed upto ₹1.00 Crore.
3. The credit guarantee fee on the loan amount disbursed would be borne by GoI for a period of 3 years.

Note 01: Under the scheme, the loans will be provided to all eligible handloom beneficiaries for 3 years.

Note 02: Individual handloom weavers who have availed loans upto the issuance date of guidelines will be eligible for getting benefits of interest subsidy and credit guarantee fee upto 3 years from the date of first disbursal of the loan amount. These benefits will be discontinued thereafter for sanctioning fresh loans to individual weavers.

Note 03: Loans extended by banks up to ₹10.00 lakhs will be covered under MUDRA and loans above ₹10.00 lakhs will be covered under Concessional Credit.

Note 04: Margin money assistance to Handloom Organization will be provided on a pro-rata basis. The lower side of margin money assistance i.e. @₹2.00 lakhs for every 100 weavers/workers or @20% of the loan amount sanctioned subject to a maximum of ₹20.00 lakhs, whichever is less will be considered.

Note 05: Margin money assistance will be transferred directly to the loan account of Handloom Organization while interest subsidy and credit guarantee fee will be transferred to the concerned bank.