Target Group

1. Individual Handloom Weavers/Weaver Entrepreneurs
2. Self Help Groups
3. Joint Liability Groups
4. Handloom organizations, including Primary Handloom Weavers’ Co-operative Societies, Apex Handloom Weavers’ Co-operative Societies, State Handloom Corporations
5. Special Purpose Vehicle (SPV)/consortia promoted by handloom weavers in Mega Cluster/Handloom Parks etc.
6. Handloom Producer Companies

Purpose

To provide adequate and timely assistance from the banks to the handloom sector to meet their credit requirements in a flexible and cost-effective manner across the country.

Eligibility

Individual / SHG / JLG / Handloom Organizations / Producer Companies

KYC Documents

Individual applicants / weavers have to submit any one of the following documents along with the application –

• Pehchan card issued by the O/o DC (Handlooms)
• Yarn passbook
• Identity card issued by the State Government

For Handloom Organization  

• Registration Certificate, Balance Sheet, Profit & Loss Account, name of the weavers registered with Organization etc.

Margin Money Assistance

• Individual Handloom Weaver / Weaver Entrepreneur – Margin Money assistance @20% of loan amount, subject to maximum of Rs. 25,000/-
• Handloom organization – Margin money assistance to Handloom Organization will be provided on pro-rata basis. Lower side of margin money assistance i.e. @Rs.2.00 lakh for every 100 weavers/workers or @20% of loan amount sanctioned subject to maximum of Rs.20.00 lakh, whichever is less will be considered. [Additional margin money requirement, if any as per banking norms will be borne by the beneficiary Agency]
• 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 State Director of Handlooms

Interest Subvention

• Subsidized loans at 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. Interest subvention as applicable will be provided maximum for 3 years from the date of first disbursal.

Credit Guarantee

• 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 decision of the Bank/Financial Institution concerned. Guarantee cover will be effective from the date of disbursement of loan for 3 years.
• If loan amount sanctioned is Rs.1.00 crore, handloom organization is eligible for getting maximum margin money assistance of Rs.20.00 lakh (margin money @Rs.2.00 lakh for every handloom weaver/worker). Therefore, credit guarantee would be covered on the loan amount disbursed upto Rs.1.00 Crore
• The credit guarantee fee on loan amount disbursed would be borne by GoI for a period of 3 years

Nature of facility

Term Loan / Working Capital

Quantum of Loan

For Individual / SHG / JLG –

Maximum Loan Amount – Rs. 10.00 Lakhs

[To be covered under MUDRA]

For Handloom Organizations / Producer Companies –

Maximum Loan Amount – Rs. 100.00 Lakhs

[Above Rs. 10.00 Lakhs – To be covered under Concessional Credit]

Margin

Limits upto Rs. 10.00 lakhs – As per Mudra Scheme

Limits above Rs. 10.00 lakhs and upto Rs. 100.00 lakhs – As per MSME credit policy

Rate of Interest

As applicable to General MSME product

Period

Term Loan:

• Loan Tenor – Maximum 3 years
• Moratorium Period – Maximum 6 months

Working Capital:

• To be renewed on annual basis as per the extant guidelines

Security

• Hypothecation of assets I.e. raw material, Work in Progress, finished goods, Book debts, equipment, Plant & Machineries etc. created out of Bank loan & margin.
• No collateral security will be required
• No Third party guarantee to be obtained

Processing & other charges

All applicable charges at card rate.

Other Scheme Guidelines

• Individual weaver who have already availed margin money assistance will not be eligible for financial assistance in terms of margin money assistance, interest subvention and credit guarantee fee under the strength of Handloom Organization, SHGs etc.
• A centralized on-line claim disbursement system “Handloom Weaver MUDRA Portal i.e. https://applications.pnbindia.in/cocd/login.aspx” has been developed by Ministry of Textiles, GOI in association with Punjab National Bank for Banks to submit the claims for financial assistance in respect of margin money, interest subvention and credit guarantee fee.
• Participating banks will submit the claims through Handloom Weaver MUDRA Portal. Margin money assistance will be transferred directly to loan account of all beneficiaries, while interest subvention and credit guarantee fee will be transferred directly to the concerned bank only for handloom organizations through the portal.
• Margin money assistance will be transferred directly to loan account of Handloom Organization while interest subsidy and credit guarantee fee will be transferred to the concerned bank.
• Fresh loan may be sanctioned after one year of re-payment of previous mudra loan to the handloom beneficiaries who availed loan in the past and have re-paid. Margin money will be available to all the beneficiaries, while interest subsidy and credit guarantee fee will be available to only Handloom Organizations

Others

• GST Registration Number for applicant is mandatory, if not exempted as per GOI guidelines
• Benchmark Norms as per MSME Policy to be complied
• Primary security should be adequately insured with Bank Clause –Insurance Premium to be borne by the borrower
• CGTMSE Coverage is mandatory. Annual premium to be paid within the stipulated time.
• n case of accounts with annual turnover more than Rs 1.00 crores, audited financial statements to be submitted