National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme
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Quick Answer
A central government scheme providing concessional credit, margin money assistance, and interest subvention to individual handloom weavers and organizations across India.
- Funding amount
- ₹25,000 – ₹1Cr
- Funding type
- Debt
- Provider
- Ministry of Textiles
- Application deadline
- Rolling
- Location
- Open to startups registered in India
About this loan
The National Handloom Development Programme: Concessional Credit/Weaver MUDRA Scheme, launched by the Ministry of Textiles, Government of India, aims to provide comprehensive financial support to the handloom sector. This scheme ensures adequate and timely access to credit from banks, addressing both term loan and working capital requirements in a flexible and cost-effective manner nationwide. By offering margin money assistance, interest subvention, and credit guarantee, the program seeks to empower individual handloom weavers, entrepreneurs, and various handloom organizations, fostering growth and sustainability within the traditional handloom industry. This initiative is a vital component of the broader National Handloom Development Programme (NHDP), designed to uplift livelihoods and preserve cultural heritage through economic empowerment.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Grant providers
The Ministry of Textiles is the central government ministry responsible for policy formulation and promotion of the textiles and apparel sector in India. Through the National Technical Textiles Mission (NTTM), launched in 2020, the ministry aims to position India as a global…
Learn moreThe National Credit Guarantee Trustee Company Limited (NCGTC) is a company wholly owned by the Department of Financial Services, Ministry of Finance, Government of India. It is not a lender and it does not give grants. It manages credit guarantee funds and schemes, which means…
Learn moreBenefits & Funding
- Amount
- ₹25,000 – ₹1Cr
- Fund type
- Debt
- Equity
- Equity-free
- Repayment
- Repayable
What You Get
- Loans: Access to essential term loans and working capital from a network of participating banks. Loans up to ₹10.00 lakh are provided under the MUDRA scheme, while higher loans exceeding ₹10.00 lakh (up to a maximum of ₹1.00 crore) are covered under Concessional Credit.
- Margin Money Assistance: Individual handloom weavers and weaver entrepreneurs are eligible for margin money assistance at 20% of the loan amount, capped at ₹25,000. Handloom organizations can receive 20% of the loan amount, up to ₹20.00 lakh, calculated on a pro-rata basis of ₹2.00 lakh for every 100 weavers/workers, whichever amount is less. This assistance is directly credited to the beneficiary's loan account.
- Interest Subvention: Eligible handloom organizations benefit from highly subsidized loans at a concessional interest rate of 6% per annum for a duration of three years. The Government of India provides an interest subvention to banks, capping the subsidy up to 7%.
- Credit Guarantee: To mitigate risk for financial institutions, loans extended to eligible handloom organizations are guaranteed by the National Credit Guarantee Trustee Company (NCGTC) or the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) for a period of three years from the loan disbursement date. The credit guarantee fee for this period is fully borne by the Government of India.
- Disbursement
- Tranched
- Duration
- 37 months
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
Applications are reviewed by the participating banks (Scheduled Commercial Banks, Regional Rural Banks, State Cooperative Banks, District Central Co-operative Banks) based on their internal credit assessment norms. Once an application is submitted, the bank processes it and, if approved, issues a loan sanction letter within one month of the application date. The banks are responsible for sanctioning loans and lodging claims for margin money assistance, interest subvention, and credit guarantee fee through the Handloom Weaver MUDRA Portal.
Application Process
- 1
Approach Bank
Eligible beneficiaries should approach any participating bank to avail loan benefits under the scheme.
You - 2
- 3
- 4
- 5
- 6
How to apply
Four steps from draft to disbursement — one action each.
- 1
Draft your application
Answer the form inside the grant tracker — AI drafts each response using your past answers, so you're not starting from a blank page.
- 2
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 3
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 4
Submit on the official portal
Use the official application link and verify all details before final submission.
- 5
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the maximum loan amount available under this scheme?
Loans up to ₹10 lakh are covered under MUDRA, and loans above ₹10 lakh up to ₹1 crore are covered under Concessional Credit.
Who is eligible to apply for this scheme?
Individual handloom weavers, weaver entrepreneurs, Self Help Groups, Joint Liability Groups, and various handloom organizations including cooperative societies and producer companies promoted by weavers are eligible.
What are the main financial benefits provided?
The scheme offers Margin Money Assistance (up to ₹25,000 for individuals, ₹20 lakh for organizations), Interest Subvention (6% concessional rate for organizations), and Credit Guarantee coverage for loans.
How long are the benefits for interest subvention and credit guarantee applicable?
Both interest subvention and credit guarantee benefits are applicable for a maximum period of three years from the date of the first loan disbursal.
How does one apply for the Weaver MUDRA Scheme?
Eligible beneficiaries should approach any participating bank (Scheduled Commercial Banks, Regional Rural Banks, State/District Co-operative Banks), collect and fill the application form with required documents, and submit it to the bank.
Are there any conditions for availing fresh loans?
Fresh loans may be sanctioned after one year of re-payment of previous Mudra loan to beneficiaries who availed a loan in the past and have repaid it.
News
- J&K handloom sector gets 2,299 weaver MUDRA loans worth Rs 39.36 cr since 2021-22kashmirnewsobserver.com · 2 months ago
- 3,064 Weaver MUDRA Loans Worth Rs 35.36 Crore Disbursed in Jammu Kashmir, Lok Sabha Toldkashmirlife.net · 2 months ago
Source: Google News aggregated
