National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme
National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme
The National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme is a pivotal initiative by the Government of India aimed at bolstering the handloom sector. This scheme provides essential financial support to handloom weavers and organizations, ensuring they have access to timely credit for both working capital and term loans, thereby promoting their growth and sustainability.
Overview of the Scheme
Launched by the Ministry of Textiles, the National Handloom Development Programme (NHDP) incorporates the Weaver MUDRA Scheme as one of its key components. The primary goal is to facilitate convenient and cost-effective access to financial resources for the handloom sector nationwide.
Participating Financial Institutions
The scheme allows participation from a variety of financial institutions, including:
- All Scheduled Commercial Banks
- Regional Rural Banks
- State Cooperative Banks
- District Central Co-operative Banks
- Any other financial institution approved by the Ministry of Textiles, Government of India
Benefits of the Scheme
Eligible beneficiaries can avail multiple benefits under this scheme, including:
Margin Money Assistance
- Individual Handloom Weaver/Weaver Entrepreneur: Margin money assistance of 20% of the loan amount, capped at ₹25,000.
- Handloom Organizations: Margin money assistance of 20% of the loan amount, with a maximum of ₹20 lakh (₹2 lakh for every 100 weavers/workers). Any additional margin requirements according to banking norms will be the responsibility of the beneficiary.
- Primary Handloom Weavers’ Co-operative Societies and State Handloom Corporations will receive margin money based on recommendations from the State Director of Handlooms.
Interest Subvention
Eligible handloom organizations can benefit from:
- Subsidized loans at a preferential interest rate of 6% for a period of three years, subject to a cap of 7% interest subvention by the Government of India.
- Interest subvention will be applicable for a maximum of three years from the date of the first loan disbursement.
Credit Guarantee
The loans provided to qualified handloom organizations will be secured by:
- The National Credit Guarantee Trustee Company (NCGTC) or the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE).
- The guarantee will be effective for three years from the date of loan disbursement.
- For a sanctioned loan of ₹1 crore, the organization can receive margin money assistance of up to ₹20 lakh.
- The Government of India will cover the credit guarantee fee for three years.
Important Notes:
- Loans are available to all eligible handloom beneficiaries for a duration of three years.
- Individual weavers who have taken loans prior to the guideline issuance are eligible for interest subsidy and credit guarantee fees for three years from the first disbursal date.
- Loans up to ₹10 lakh will fall under the MUDRA category, while those exceeding this amount will come under Concessional Credit.
- Margin money assistance will be provided on a pro-rata basis, considering the lesser of 20% of sanctioned loan or ₹2 lakh for every 100 weavers/workers, capped at ₹20 lakh.
- Margin money will be directly credited to the loan accounts of Handloom Organizations, whereas interest subsidies and credit guarantee fees will be credited to the respective banks.
Eligibility Criteria
Various categories are eligible to apply for loans under this scheme, including:
- Handloom weavers involved in weaving activities
- Weaver Entrepreneurs
- Self Help Groups (SHGs)
- Joint Liability Groups (JLGs)
- Handloom organizations, such as Primary Handloom Weavers’ Co-operative Societies
- Apex Handloom Weavers’ Co-operative Societies
- State Handloom Corporations
- Producers’ Companies/Consortia initiated by handloom weavers
Important Notes:
- Individual weavers who have received margin money assistance are not eligible for further financial support in terms of margin money, interest subvention, and credit guarantee fees through organizations, SHGs, etc.
- New loans may be sanctioned after one year of repaying previous MUDRA loans. Margin money will be accessible to all beneficiaries, while interest subsidies and credit guarantee fees are limited to Handloom Organizations.
Application Procedure
Offline Application Process
- Eligible beneficiaries should visit the relevant Participating Bank with the required documents to apply for loan benefits.
- Applicants must collect the application form from the bank.
- Complete the application form, ensuring all mandatory fields are filled and attach necessary documents.
- Submit the duly filled and signed application form along with the supporting documents to the bank.
Important Notes:
- The bank will issue a loan sanction letter to the applicant within one month of the application date.
- Participating Banks will approve loans to Handloom Organizations and must submit claims for margin money assistance, interest subvention, and credit guarantee fees through the Handloom Weaver MUDRA Portal.
- The State Director of Handlooms will conduct extensive awareness campaigns through newspapers and information sessions.
Eligibility Criteria
The following agencies are eligible to avail loans from Banks/Financial Institutions:
Handloom Weavers involved in weaving activity,
Weaver Entrepreneur,
Self Help Groups,
Joint Liability Groups,
Handloom organizations, including Primary Handloom Weavers’ Co-operative Societies,
Apex Handloom Weavers’ Co-operative Societies, State Handloom Corporations and
Producers’ Companies/Consortia promoted by handloom weavers including those promoted under Cluster/Mega Cluster/Handloom Parks under SITP or other schemes of the Ministry of Textiles
Note 01: Individual weavers who have already availed of 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.
Note 02: 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 fees will be available to only Handloom Organizations.
Benefits
Margin Money Assistance:
Individual Handloom Weaver/Weaver Entrepreneur- Margin Money assistance @20% of the loan amount, subject to a maximum of ₹25,000/-.
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.
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.
Interest Subvention:
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.
Interest subvention as applicable will be provided a maximum of 3 years from the date of the 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 the decision of the Bank/Financial Institution concerned. Guarantee cover will be effective from the date of disbursement of the loan for 3 years.
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.
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.
Application Process
Apply OfflineStep 01: Eligible beneficiaries are required to approach the Participating Bank concerned along with required documents etc. for availing of loan benefits under the scheme.
Step 02: The applicants need to collect the application form from the bank.
Step 03: In the application form, fill in all the mandatory fields and attach copies of all the mandatory documents.
Step 04: Submit the duly filled and signed application form along with the documents in the bank.
Note 01: A loan sanction letter will be issued by the bank to the applicant within one (1) month of the application date.
Note 02: Participating Banks will sanction loans to the Handloom Organizations and have to lodge claims for disbursal of margin money assistance, interest subvention, and credit guarantee fee through the Handloom Weaver MUDRA Portal.
Note 03: Intensive publicity will be carried out by the State Director of Handlooms through newspapers, awareness camps, and by distributing pamphlets in weavers’ pockets highlighting the benefits available under the scheme.
Release of Funds:
A centralized online claim disbursement system “Handloom Weaver MUDRA Portal i.e. https://cocd.mypnb.in/login.aspx
” has been developed 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.
References & Official Links
Scheme Details
| Full Name | National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme |
| Short Title | NHDP:CCWMS |
| Level | Central |
| Scheme For | Infra |
| Ministry | Ministry Of Textiles |
| Categories | Banking,Financial Services and Insurance |
| States | All India |
| Gender | All |
| Age Range | Any — 7 years |
| Area | Rural |
| Source | www.myscheme.gov.in ↗ |
Deepika Raikwar · 📅 01 Jun 2026
Deepika Raikwar is an Education Analyst and scholarship researcher who focuses on public welfare and merit-based scholarships. She simplifies complex eligibility rules, deadlines, and application processes to help common people access reliable funding opportunities worldwide.
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