Indian Textile Minister discusses easier credit with banks

12 Jul '13

2 min read

India’s Textiles Minister K Sambasiva Rao met heads of major nationalized banks to discuss easier availability of subsidized credit to handloom weavers.

He was informed that around 70,000 Weavers’ Credit Cards (WCCs) have been issued and loan of more than Rs. 2.10 billion has been sanctioned to handloom weavers, according to an official press release.

The Minister reviewed the progress of issuance of WCCs and lauded the efforts being made by banks, particularly by State bank of India, Canara Bank, Andhra Bank, and United Bank of India, in this regard.

SBI is bearing the guarantee fee required by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for providing credit guarantee on loans extended by SBI, the Minister said.

“The CEOs of banks have assured me to extend full support in extending the loan to handloom weavers and they will monitor the progress of issuance of weavers’ credit cards at their level,” the Minister added.

The availability of subsidised working capital is one of the essential requirements for growth of the handloom sector in India. In view of the same, the Government approved ‘Financial Package’ as well as ‘Comprehensive Package’ in 2011 to ensure the smooth flow of credit to handloom sector.

Under the financial package, the overdue loan of handloom cooperatives and individual weavers as on March 31, 2010, is being waived and banks have to provide fresh credit with interest subvention of 3 percent and credit guarantee for 3 years.

Those weavers who are not getting benefits under financial package are being assisted through institutional credit component of comprehensive package wherein WCCs are being issued to handloom weavers and government is providing 3% interest subvention along with credit guarantee through CGTMSE and margin money assistance.

Further, appreciating the importance of much needed subsidised credit for handloom sector, on the request of Ministry of Textiles, the Finance Minister in his Budget speech for 2013-14, announced loan to handloom sector at 6 percent interest rate.

The Ministry has also developed web enabled application www.wcchandlooms.in for online submission of progress of issuance of WCCs by banks and state governments.

Fibre2fashion News Desk - India

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