The Weaver Mudra Scheme (WMS) is a special financial assistance initiative designed to empower handloom weavers in India. This scheme provides crucial funding through Weaver’s Credit Cards or term loans, allowing artisans to secure working capital and purchase necessary tools and equipment. The scheme plays a pivotal role in strengthening the traditional handloom industry, ensuring that small-scale weavers can sustain and expand their businesses without facing financial restrictions. With features like collateral-free loans, interest subsidies, and easy repayment options, WMS serves as a lifeline for thousands of handloom weavers across the country.
Objectives of the Handloom Weaver Mudra Scheme
The Handloom Scheme aims to provide adequate and timely assistance from banks to weavers to meet their credit requirements, including both investment needs and working capital. The scheme is designed to be flexible and cost-effective, ensuring accessibility in both rural and urban areas.
The specific objectives include:
· Financial Inclusion: Ensuring that handloom weavers, especially those in rural areas, get access to financial resources.
· Business Expansion: Providing adequate funds for purchasing raw materials, upgrading looms, and improving working conditions.
· Encouraging Entrepreneurship: Supporting individual weavers and small handloom businesses to grow and become self-reliant.
· Preserving Traditional Crafts: Helping India’s rich handloom legacy thrive by ensuring financial sustainability for artisans.
· Employment Generation: Strengthening the sector to create more job opportunities, particularly in rural and semi-urban regions.
Eligibility Criteria of the Weaver Mudra Scheme
The scheme covers a wide range of weavers and organizations involved in handloom weaving. The key eligibility requirements include:
1. Individual Handloom Weavers are actively engaged in weaving activities.
2. Weaver Entrepreneurs who wish to expand their business operations.
3. Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) working in the handloom sector.
4. Primary Handloom Weaver’s Cooperative Societies, which support local weavers.
5. Apex Handloom Weaver’s Organizations, including federations and state-level handloom bodies.
6. Producer Companies involved in promoting handloom products.
To avail the benefits, applicants must be registered with State Handloom Departments, Handloom Development Organizations, or Co-operatives and have a valid Aadhaar-linked bank account.
Nature and Extent of Loan
The Weaver Mudra Scheme offers different types of financial assistance to weavers:
1. Cash Credit Limit:
· Minimum ₹50,000 for general handloom weaving.
· Minimum ₹1 lakh for silk weaving.
· Maximum ₹5 lakh for working capital requirements.
2. Term Loan (TL) Limit:
· Maximum ₹2 lakh for investment in looms, equipment, and infrastructure.
3. Comprehensive Loan (WC+TL):
· Maximum combined loan limit up to ₹5 lakh.
Insurance Cover
· The bank may arrange insurance coverage for the assets financed under the scheme as per existing norms.
· The cost of insurance will be borne by the beneficiary and debited to their loan account.
Subsidies Provided by the Government
1. Interest Subsidy
· The government provides loans at a 6% interest rate to the handloom sector.
· The interest subsidy covers the difference between the bank’s actual rate and 6% interest borne by the borrower.
· The maximum interest subvention is capped at 7%.
· Interest subsidy will be provided for a maximum of 3 years from the date of the first loan disbursement.
· The subsidy is credited to the borrower’s account every month.
2. Margin Money Assistance
· 20% of the project cost is provided as margin money assistance.
· The maximum subsidy per weaver is ₹10,000.
· This assistance helps weavers leverage bank loans effectively.
· The margin money subsidy is credited after loan sanction.
3. Annual Guarantee Fee (AGF) Payment
· All loans under WMS must be covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
· The credit guarantee fee due from the beneficiary will be paid by the Ministry of Textiles.
· Interest subsidy and credit guarantee assistance are provided for a maximum of 3 years from the date of the first disbursement.
Security Requirements for Weaver Mudra Scheme
1. Principal Security: Hypothecation of assets such as raw materials, work-in-progress (WIP), finished goods, equipment, plant & machinery, and book debts created from the bank loan & margin money.
2. Collateral Security: All loans must be covered under the Credit Guarantee Scheme of CGTMSE/CGFMU, eliminating the need for additional collateral.
How to Apply for the Weaver Mudra Scheme?
Eligible weavers can apply for loans under the Weaver Mudra Scheme through the following process:
1. Visit the Nearest Bank:
· Public sector banks, regional rural banks, and cooperative banks participate in the scheme.
· Applicants should check with their local branch for details.
2. Prepare the Required Documents:
· Aadhaar Card (linked to a bank account).
· Proof of Business (registration under a handloom organization, cooperative society, or SHG).
· Bank Passbook & PAN Card (if applicable).
· Loan Application Form (available at bank branches or online portals).
3. Loan Application Submission:
· The completed application, along with documents, is submitted to the bank.
· The loan is processed under the Pradhan Mantri Mudra Yojana (PMMY) framework.
4. Loan Approval & Disbursal:
· Upon approval, the loan amount is credited to the weaver’s account.
· Funds can be used for working capital, tool purchases, and other business needs.
Conclusion
The Weaver Mudra Scheme has proven to be a game-changer for India’s handloom industry, providing weavers with much-needed financial support. By offering collateral-free loans, interest subsidies, and reimbursement of guarantee fees, WMS ensures that artisans can focus on their craft without financial burdens. With continued efforts to raise awareness and streamline the loan process, the scheme can further uplift the livelihoods of thousands of weavers, preserving India’s handloom legacy for future generations.
For any handloom weaver looking for financial assistance, the Weaver Mudra Scheme is a golden opportunity to achieve growth and stability. If you are a weaver or know someone who can benefit from this scheme, spread the word and encourage them to apply today.