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Banks urged to increase funds to handloom sector
05
Jun '10
As regards improving the credit availability to the handloom and handicraft sectors, the sub-committee of the State Level Bankers' Committee (SLBC) has urged the banks, to augment financing to these sectors.

This is because, the credit availability to handloom and handicraft sectors, does not match with those available to other sectors and a huge mass of the Primary Weavers' Co-operative Societies have turned useless.

Considering the circumstances, banks and financial institutions have been appealed to extend support to the clusters that have been notified by the textile department of Orissa government and to lend more pursuant to the cluster approach.

Recently, during a sub-committee meet, it was resolved that, banks should provide funds to handicraft artisans, while covering the same under the credit guarantee funds trust, for micro and small entrepreneurs.

Banks were authorized to grant DRI loans to weavers and artisans from handloom and handicraft sector, who belong in the below poverty line (BPL) category. Also, the panel issued directions that, the loan applications by the self help groups (SHGs), functional in these sectors and are awaiting approval, should be cleared as soon as possible.

Furthermore, in the District Credit Committee (DCC) meet, it was decided to include the handloom and handicraft sectors as products for regular agenda and that, the functioning of the banks in funding these sectors needs, to be assessed meticulously.

Textile and Handloom Department has also been called on to convey to the district collectors, regarding formation of District Level Task Force (DLTF).

It is noteworthy that, the handloom and handicraft sectors besides employing around 5 lakh skilled artisans and weavers, also pays for the country's export earnings. Nonetheless, as the handloom weavers lean on the micro finance institutions (MFIs), these institutions take undue advantage of them, by charging them with extravagant interest rates, on loans advanced by them.

Raising credit flow in favour of these sectors, could aid the artisans and weavers to avail of loans with lower interest rates.

Fibre2Fashion News Desk - India

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