Weaver Mudra Scheme

The Weaver MUDRA Scheme is a credit-scheme run by the Ministry of Textiles (Government of India), under the broader framework of the National Handloom Development Programme (NHDP). The scheme is intended to provide affordable and timely credit to individual handloom weavers, weaving entrepreneurs, and handloom organisations (co-ops, Self-Help Groups, producer companies, etc.) to support working capital needs, purchase of raw materials, tools/equipment, and other weaving-related expenses. The aim is to support traditional weaving livelihoods, reduce dependency on informal high-cost credit, and ensure sustainable handloom sector growth via concessional loans, interest support and credit-guarantee benefits.

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

Key Features

Credit via Weaver’s Credit Card (WCC) or term loan: Under the Weaver MUDRA scheme, banks issue a Weaver’s Credit Card (WCC) to eligible weavers/entrepreneurs or provide a term-loan depending on requirement (working capital, equipment purchase, raw materials, etc.). Banks such as the State Bank of India (SBI) participate.
Margin-money assistance (subsidy): The scheme offers margin money assistance equal to 20% of loan amount, subject to a maximum of ₹25,000 per individual weaver. For handloom organisations or groups, margin money assistance is provided at 20% of loan amount, capped at ₹2.00 lakh per 100 weaver/worker.
Concessional interest rate / interest subvention: Loans under scheme are offered at concessional interest rates. For eligible loans, effective interest cost is reduced; in many cases lending is at around 6% for the initial period (subject to a cap of 7% by GoI) - making borrowing more affordable than informal credit sources.
Credit guarantee coverage: Loans under Weaver MUDRA can be covered under guarantee schemes such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) or similar guarantee mechanism - which reduces or removes need for collateral, facilitating easier access to formal credit.
Support for working capital + equipment/raw materials: The credit may be used for purchase of yarn/raw-materials, dyes, looms/accessories, weaving equipment, working capital for production - giving flexibility to meet variable needs of the weaving enterprise.
Inclusive coverage (individuals & organisations): Scheme is available to individual weavers, weaver-entrepreneurs, SHGs, JLGs, co-operative societies, Producer Companies, handloom organisations, clusters — thus supporting both small artisans and small-scale MSMEs in the handloom sector.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Margin Money Assistance (subsidy)	20% of loan amount, up to ₹25,000 per weaver / ₹2.00 lakh per 100 weavers (organisation)	Example: If a weaver takes a loan of ₹1 lakh for raw materials, margin money assistance is ₹20,000 (if not exceeding the limit). This reduces his own capital requirement.
Concessional Interest / Interest Subvention	Loans at subsidised rate (e.g. ~6–7%) for initial period (usually 3 years)	Instead of high commercial rates, borrower pays lower interest; Government bears part of interest cost.
Credit Guarantee	Guarantee cover under CGTMSE/NCGTC for specified period (e.g. 3 years)	Reduces requirement of collateral — helpful for small artisans lacking assets, encourages banks to lend.
Working Capital / Term Loan	Loan quantum for weavers: typically ₹0.5 lakh to ₹2 lakh; for organisations much higher (up to ₹2 Crore or more as per bank norms)	Enables purchase of raw materials, dyes, looms; sustain operations, expand weaving capacity, manage cash flow.

Eligibility Criteria

Who can apply:

Individual handloom weavers / weaver-entrepreneurs.
Self-Help Groups (SHGs), Joint Liability Groups (JLGs) of weavers.
Handloom organisations: Primary Handloom Weavers’ Cooperative Societies, Apex co-ops, State handloom corporations, Producer Companies, SPVs formed by weaver groups.
Registered artisans in handloom sector (traditional weaving, Pashmina/weaving crafts etc.)

Who cannot apply:

Loan utilisation must be for weaving-related activity: working capital, raw materials, equipment.
Borrower may need to contribute margin money (remaining 80%) as per bank’s assessment.
Loan proposals must be considered viable by bank to get sanction; guarantee coverage depends on bank and guarantee scheme guidelines.

Documents Required

Identity proof (Aadhaar, Voter ID, etc.)
Address proof (ration card, electricity bill, etc.)
Weaver’s identity card / certificate / branch registration / proof of handloom activity
Bank account details / account passbook or cancelled cheque
Project proposal / estimate (if applying for equipment / raw materials)
For organisations: registration certificate, list of members, constitution / by-laws, registration of cooperative or producer company

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: Apply via Banks (PSU / RRB / Co-op Banks)

Visit your nearest participating bank.
Request the Weaver Mudra Scheme application form.
Submit KYC, Weaver ID Card, cluster certificate, and business details.
Bank assesses your credit requirement (working capital/term loan).
Loan sanctioned under Mudra category (Shishu/Kishor/Tarun).
Funds disbursed to bank account.

Option 3: Apply Through State Handloom Departments / Cluster Offices

Visit district/state Handloom Office or Weaver Service Centre (WSC).
Officials will verify your Weaver Identity Card.
They assist with bank linkage for WMS loan and subsidy documents.
Banks sanction loan after verification.