Cash-starved small handloom weavers across the country are set to get almost double the credit available now in a move aimed at helping them increase their productivity and gain independence from master weavers.

The Textile Ministry is roping in large public sector banks such as the United Bank, UCO Bank, Canara Bank, Bank of India and PNB to partner in a scheme to extend concessional loans up to ₹5 lakh to handloom weavers in all States under the Pradhan Mantri Mudra Yojana, Alok Kumar, Development Commissioner, Handlooms, told BusinessLine .

The Centre has decided to discontinue the Weaver Credit Card scheme, which provides a maximum loan of ₹2 lakh.

From July, handloom weavers will be extended credit only under the Weaver Mudra scheme, which will have the additional feature of allowing them to withdraw the sanctioned amount from ATMs using RuPay cards.

“The decision has been taken encouraged by the huge success of the pilot project under the ‘PNB Weaver Mudra Scheme’ in Varanasi and Bhubaneswar as the average credit disbursed doubled to ₹50,000 for the 500 weavers covered as opposed to an average of only ₹23,000 under the existing Weaver Credit Card scheme,” Kumar said.

Kumar is keeping track of success stories emerging from the pilot project with weavers getting access to more working capital. Dasrathi Patra, Surendra Mati and Bata Patra are all weavers at Manibandha in Cuttack who availed themselves of a loan of ₹50,000 each last December under the Mudra scheme and successfully managed to cut ties with the master weaver, as they had enough capital to buy raw materials on their own.

“In the case of these three weavers, income has gone up from 60 per cent to 200 per cent in four months. Credit under the older scheme was just not enough to meet the requirement. But, if you put enough money in the hands of weavers, they can benefit immensely,” Kumar said.

The Weaver Mudra Scheme, too, will provide credit at concessional rates as the credit card scheme. It has been modified from the original Mudra scheme to incorporate the 3 per cent interest subvention provided to handloom weavers for three years.

The Centre plans to cover five lakh weavers under the Mudra scheme over the next three years and has sought the assistance of States. “We will ask States to take a number of weaver clusters, talk to banks and then saturate the clusters in one year so that it has a sizeable impact and monitoring is easy,” he added.

There are over 23 lakh looms in the country and about 43 lakh workers engaged in the sector. Despite a fall in overall exports from the country, export of handlooms has been more or less flat at around ₹2,300 crore per annum.

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