North-East Handloom Handicrafts (NEHH)

The North-East Handloom Handicrafts scheme is implemented by North Eastern Development Finance Corporation Ltd. with support from the Government of India. It is specially designed to promote handloom and handicraft enterprises in the North-Eastern Region by providing term-loan assistance for projects up to ₹25 lakhs. You as an MSME or start-up can use this scheme to set up, expand or modernise your handloom/handicraft unit. The scheme focuses on small and micro projects and aims to support artisans, weavers, designers and craft-based entrepreneurs. The exact launch date and some finer terms need confirmation from the latest official circular. The main benefit is easier access to formal finance at a stable interest rate with a structured repayment period, helping your business grow in a planned way.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Maximum project cost limit of ₹25 lakhs: This limit ensures the scheme remains focused on micro and small enterprises rather than very large units. Your full project outlay—such as looms, tools, small machinery, basic civil work and initial production infrastructure—must be within ₹25 lakhs. This helps genuine small artisans and start-ups access targeted support.
Term-loan assistance up to 75% of project cost: Up to three-fourths of your total project cost can be financed under the scheme. For example, if your project cost is ₹20 lakhs, up to ₹15 lakhs may be supported as a term-loan. This significantly reduces the burden of arranging large funds on your own and helps you focus on business operations.
Minimum promoter contribution of 25%: You must bring in at least 25% of the total project cost from your own savings or acceptable funding sources. For a project of ₹16 lakhs, your minimum contribution must be ₹4 lakhs. This condition ensures that you are financially involved in the project, which improves the seriousness and creditworthiness of your proposal.
Interest rate fixed at 8%: The term-loan is offered at a standard interest rate of 8% per annum under the scheme (subject to confirmation from latest circulars). This rate is generally more favourable than many purely commercial loans. A fixed rate also helps you as an MSME to plan your repayments and manage cash flows more confidently.
Repayment period between 3–7 years including moratorium: You get flexibility to choose a repayment period between three and seven years, depending on project viability and assessment by NEDFi. During the moratorium period, you may only need to pay interest, not principal. This gives your unit time to install machinery, stabilise production and start generating revenue before full EMIs begin.
Eligible for handloom and handicraft manufacturers, designers and experts: The scheme is tailored for enterprises engaged specifically in handloom and handicraft activities—whether you produce, design, or provide expert services in these crafts. Units can be set up as proprietorships, partnership firms or companies. This makes it suitable both for individual artisans upgrading their work and for organised start-ups with a formal structure.
Applicable only to units located in the North-Eastern Region: The scheme is region-focused and is meant only for units located in the North-Eastern states. This ensures that the financial support directly benefits artisans and entrepreneurs from this region, encouraging local employment, preservation of traditional crafts and regional economic development.

Financial Assistance

Component	Assistance Provided	Detailed Description & Example
Project Cost Cap	Up to ₹25 lakhs	Your entire project—like purchase of looms, raw material storage racks, small finishing equipment, basic interiors for a workshop and related set-up expenses—must remain within ₹25 lakhs. For instance, if all these together cost ₹23 lakhs, your project is fully within the permissible limit.
Term-Loan Assistance	Up to 75% of project cost	The scheme can finance up to three-fourths of the total project cost. For a project of ₹20 lakhs, you may get up to ₹15 lakhs as term-loan. You then arrange the remaining ₹5 lakhs as your share. This structure helps you start or scale operations without needing the entire amount upfront.
Promoter’s Contribution	Minimum 25% of project cost	You are required to invest at least one-quarter of the project cost from your own funds. For example, if your project cost is ₹12 lakhs, you must bring in at least ₹3 lakhs. This contribution can come from savings, family funds or other legitimate sources and shows your commitment to the success of the unit.
Interest Rate	8% per annum (needs confirmation from latest circular)	The loan is expected to carry an interest rate of 8% per year. Compared to many purely commercial loans with higher interest, this rate is more affordable for a craft-based MSME. For example, on a ₹10 lakh loan, annual interest at 8% would be ₹80,000, allowing more predictable planning of EMIs.
Repayment Period & Moratorium	3–7 years including moratorium	The total repayment tenure can be between three and seven years. In the initial moratorium period (exact duration as approved), you may only pay interest, not principal. For instance, if you get a one-year moratorium, you can use that year to set up, build markets and improve sales before regular principal-plus-interest EMIs start.

Eligibility Criteria

Who can apply:

Enterprise must be engaged in handloom or handicraft activities (production, design or related expert services).
Unit must be located in one of the North-Eastern states.
Legal forms allowed: proprietorship, partnership firm or company.
Project cost should be up to ₹25 lakhs only.
Promoter’s contribution must be at least 25% of the total project cost.

Who cannot apply:

Units located outside the North-Eastern Region are not eligible.
Projects with cost above ₹25 lakhs cannot avail this scheme.
Enterprises not related to handloom/handicraft activities are outside the scope.
Applicants failing basic creditworthiness or documentation checks as per NEDFi norms may be declined.

Documents Required

Identity proof of promoter(s) (Aadhar / Voter ID / Passport)
Address proof of business unit or promoter residence
Proof of business registration (if company/partnership) or proprietor declaration
Project report/business plan detailing cost, items to be produced, marketing plan, anticipated sales, employment generation
Bank account details and latest bank statements (if existing unit)
Credit history/clearance certificate showing no default (for government scheme or bank loan)
Handloom/handicraft activity proof or certificate where applicable (for weavers/artisans)
Cost estimates of machinery/equipment/raw materials with vendor quotations
State‐specific approvals/clearances if required (environment, trade licence)

Application Process for the Scheme

Option 1: Apply with Bullit (Recommended)

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations.

Recommended for: Lean teams. Designed to save you time and effort. Access expert help from start to finish.

Option 2: Government/Official Route

Download the prescribed application form from NEDFi’s website (or obtain from their office).
Fill in project details: business plan, cost structure (up to ₹ 25 lakhs), promoter contribution, etc.
Submit the completed application to: Chairman & Managing Director, NEDFi, NEDFi House, G.S. Road, Dispur, Guwahati – 781006 (Assam).
Attach requisite documents (see below). Wait for sanction of the term loan up to 75% of project cost, followed by disbursement.
Upon sanction, execute loan agreement, commence project and adhere to term repayment schedule (3–7 years).

Option 3: State/Cluster Support Linkages
Explore additional state handloom/handicraft cluster schemes in the North-East, link your project to common facility centres, design & training support offered by agencies such as the North Eastern Handicrafts & Handlooms Development Corporation Ltd. (NEHHDC) or state handloom boards. (Use these as value‐added support alongside the NEHH scheme).