Pradhan Mantri Credit Scheme

The Government of India has introduced the Pradhan Mantri Credit Scheme to support the establishment of power loom units across the country. Through this scheme, financial assistance will be provided to decentralized powerloom units or weavers. In this article, we look at the Pradhan Mantri Credit Scheme in detail. Also, read about How to get Pradhan Mantri MUDRA Yojana (PMMY) Loan

Objective of the Scheme

The Objectives of the Pradhan Mantri Credit Scheme are explained below:

To provide financial assistance through Margin Money Subsidy and interest reimbursement as against the credit facility (term loan) availed under Pradhan Mantri Mudra Yojana (PMMY) to the decentralised power loom units/weavers.
Margin Money Subsidy as against the credit facility (term loan) availed under Stand-up India scheme by the SC, ST & Women Entrepreneur of the decentralised power looms units/weavers to meet their credit requirements such as for investment needs (Term Loan) and working capital etc.

Features of the Scheme

The following are the features of the Pradhan Mantri Credit Scheme for the powerloom weavers.

Subsidy: All the eligible persons of the powerloom units in the state will get up to 1 Lakh subsidy. (i.e) Up to 20% financial assistance will be provided on their project cost.
Interest Rate and Loan Amount: The amount of loan up to Rs. 10 Lakhs for the project will be provided. The rate of interest will be 6% per annum which is less than the market cost. This loan will be provided for up to five years.
Solar Panels: According to the scheme the eligible beneficiaries of power loom units will be able to fix solar panels in their lands to get more assistance from the government. By installing solar panels, it will be easy for the small units to generate more in a short time.
Number of Looms: If any unit has more than or equal to 8 looms in a single unit then the 50% subsidy on installation of solar panel under this scheme will be provided.
Beneficiaries: The scheme benefits nearly 2.5 million power loom units across the country.
Technological upgrade: SAATHI or sustainable accelerated adoption of efficient technology to help small Industries will be adopted for the technological upgrade in the textile industries.

Eligibility Criteria

The eligibility criteria for availing scheme benefits from the central government are as follows.

All Existing individual power loom units involved in weaving activity.
New individual
Group enterprises

Subsidy Provided

Under this scheme, the Central Government will provide margin money subsidy of up to twenty per cent of the project cost with a cover of Rs 1,00,000 as well as interest subsidy at 6% per cent per annum for working capital, and a term loan of up to Rs 10,00,000 for a maximum period of five years.

Documents Required

The specified documents for applying for this scheme are mentioned below.

Proof of Identity: Voter’s ID/ Passport/Driving License/PAN Card/Signature identification from Present Bankers of Proprietor, partner of Director (If a company).
Proof of Residence: Telephone Bills, Electricity Bill, Property Tax Receipt /Passport/Voter’s ID Card of Proprietor, partner of Director (if a company).
Capital structure agreement.
Proof of Business Address.
The person applying for a scheme should not be a defaulter in any Financial institutions or banks.
MOA of the Company or Partnership Deed of partner etc..
Assets and liabilities statement of promoters along with income tax returns.
Rent Agreement and clearance from pollution control board if required.
SSI / MSME registration if applicable.
In the case of working capital limits, the Projected balance sheets for two years has to be enclosed.
Copy of lease deeds or title deeds of all the properties being offered as primary and collateral securities.
Documents to confirm whether the applicant belongs to SC/ST Category.
Certificate of incorporation for ROC to confirm whether majority stakeholding in the company is with the applicant who belongs to SC, ST or Woman category.
Profile of the unit which holds names of promoters, other directors in the unit, the activity undertaken from all offices and plants, shareholding pattern etc..
Three years balance sheets of the Associate or Group Companies (if required).
Project report holding details of the machinery, price, names of suppliers, financial information like the capacity of machines, production sales, calculated profit and loss and balance sheets for the course of the loan has to be enclosed.
The details of staff to be hired, labour, the basis of the assumption of such financial information etc..
Manufacturing process details, the primary profile of the company, any tie-ups, information about raw material used and their suppliers, details of the buyers, details of major competitors and the company’s strength and weaknesses as compared to their competitors etc.

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Frequently Asked Questions

Common questions about Pradhan Mantri Credit Scheme for Power Loom Units in India.

The Pradhan Mantri Credit Scheme is a government initiative aimed at providing financial assistance to decentralized powerloom units or weavers through margin money subsidy and interest reimbursement on credit facilities availed under the Pradhan Mantri Mudra Yojana (PMMY) and Stand-up India schemes.

All existing individual powerloom units involved in weaving activity, as well as new individual or group enterprises, are eligible for the benefits under this scheme.

Under this scheme, the Central Government will provide a margin money subsidy of up to 20% of the project cost, with a maximum of Rs. 1,00,000. Additionally, an interest subsidy of 6% per annum is provided for working capital and term loans of up to Rs. 10,00,000 for a maximum period of five years.

If a powerloom unit has more than or equal to 8 looms, it will be eligible for a 50% subsidy on the installation of solar panels under this scheme. This will help small units generate more income in a shorter time.

The scheme promotes the adoption of SAATHI (Sustainable Accelerated Adoption of Efficient Technology to Help Small Industries) for technological upgrades in the textile industries.

Applicants need to provide proof of identity, proof of residence, business address, capital structure agreement, income tax returns, lease deeds or title deeds, and other relevant documents such as SSI/MSME registration, project reports, and balance sheets.

The Pradhan Mantri Credit Scheme is expected to benefit nearly 2.5 million powerloom units across the country.

Yes, the scheme provides margin money subsidy to SC, ST, and women entrepreneurs of decentralized powerloom units/weavers who avail credit facilities under the Stand-up India scheme.

The primary objective of the Pradhan Mantri Credit Scheme is to provide financial assistance to decentralized powerloom units and weavers for investment needs, such as term loans and working capital requirements.

The term loan provided under the Pradhan Mantri Credit Scheme is available for a maximum period of five years.