United Shilpi Card for Artisans

“Shilpi” who may perhaps be Artists or Artisans, perform a range of productive and creative activities under tiny sector that are covered broadly under Tiny and Small Scale Industries. Even though the bank has been extending finance to this group of borrowers, a large section of Shilpi is yet to be covered. To provide easy credit and enable identity to Shilpi, a new system entitled “United Shilpi Card” has been devised as discussed in the article.

Purpose of Loan

The United Shilpi Card is designed to help artists and artisans involved in the following activities with bank financing:

Clay modeling
Drawing and painting.
Running coaching centers for music, dance and choreography
Fashion designing
Computer graphics
Stone carving (sculpture)
Bell metal works
Applique work
Weaving and dyeing
Embroidery work, Wool knitting
Mat, Basket, Rope, Leaf plate making
Pickles, papad, jam, jelly, potato chips making
Sweet meats making and preparing dry foods like Muri, Chira,
Fried grams, Mixtures and Chanachur
Making toys and other seasonal festive items, etc.

Eligibility for the Loan

All Shilpi involved in productive and creative activities as indicated above and those who are not being defaulters and certified by the Sarpanch, Sabhadhipati, Anchal Pradhan or the Municipal or Corporation are eligible for the United Shilpi Card. The credit limit extended under this card will be in the form of revolving cash credit. Since financing Shilpis comes completely under the tiny, cottage and village industry sector, appraisal of working capital necessities may perhaps be made as per Nayak Committee recommendations i. e. 20% of projected yearly turnover method in the cases where it is applicable. On expiry of the period of validity of the Shilpi cards of the current borrowers, United Shilpi Card may be re-issued to them on demand with an increase in loan limit or same limit. If the Shilpi's wants some term loan for obtaining tools and equipments, furniture, fixtures and other accessories incidental to the activity undertaken, the same will too be included within the above credit limit and in such case, the permit shall be accorded for a composite loan composed of working capital and term loan.

Amount of Loan

A minimum loan of Rs.25000 to a loan of Rs.10 lakh can be provided under the United Shilpi Card. For loan of Rs.25000 to Rs.2 lakh, a margin of 15% is required. For limit greater than Rs.2 lakh, a margin of 20% is required.

All the assets created out of the loan will be hypothecated to the Bank. Since credit limits permitted under this scheme will come under SSI Sector, no collateral is to be insisted upon and Credit Guarantee Coverage will be taken for all loans authorized.

Interest Rate

Interest rate for the scheme is subject to be fixed based based on the bank's base rate. Nevertheless, if any borrowers under Shilpi Card come under United Udyogshree Yojana specifications, he/she will be entitled to get interest reduction by 0.50%. Where women entrepreneurs are considered the borrowers or they link as co-borrowers with major shareholding, there is a concession in the margin and interest rate. Concessional margin of 10% for loans up to Rs 2 lakhs and 15% for loans above Rs 2 lakhs to Rs 10 lakhs and interest concession of 0.50% is applicable for loan above Rs.1 lakh. There is no service or processing charge to be applied for issue of Shilpi card to women entrepreneurs.on of the scheme.

Repayment of Loan

For working capital limit, the limit is expected to be used as a revolving cash credit and will present for any number of drawls and repayments within the limit subject to assessment within one year. For term loan availed, the loan will be repayable in 3 years.

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Frequently Asked Questions

Common questions about United Shilpi Card for Artisans.

The United Shilpi Card is a new credit facility designed to provide easy access to bank financing for artists and artisans involved in various productive and creative activities under the small-scale industry sector. It aims to enable identity and financial support for this segment of borrowers.

All artists and artisans involved in productive and creative activities such as clay modeling, painting, fashion designing, stone carving, weaving, embroidery, and making pickles, sweets, toys, and festive items, are eligible for the United Shilpi Card. They should not be defaulters and must be certified by local authorities like the Sarpanch, Sabhadhipati, or Municipal Corporation.

The loan amount ranges from a minimum of Rs. 25,000 to a maximum of Rs. 10 lakh under the United Shilpi Card. Loans up to Rs. 2 lakh require a margin of 15%, while loans above Rs. 2 lakh require a margin of 20%.

The interest rate for the United Shilpi Card is subject to the bank's base rate. However, borrowers eligible under the United Udyogshree Yojana specifications can get an interest rate concession of 0.50%.

Yes, if the borrower is a woman entrepreneur or co-borrower with major shareholding, they are eligible for a concessional margin of 10% for loans up to Rs. 2 lakhs and 15% for loans above Rs. 2 lakhs up to Rs. 10 lakhs. Additionally, they can avail of an interest concession of 0.50% for loans above Rs. 1 lakh. There is no service or processing charge for issuing the Shilpi Card to women entrepreneurs.

The working capital limit provided under the United Shilpi Card is expected to be used as a revolving cash credit facility, allowing for multiple drawals and repayments within the limit, subject to assessment within one year.

If a term loan is availed for acquiring tools, equipment, furniture, or accessories related to the artisan's activity, the term loan component will be repayable in 3 years.

No collateral is required for loans under the United Shilpi Card scheme, as the credit limits fall under the Small-Scale Industry (SSI) sector. However, all assets created out of the loan will be hypothecated to the bank.

Yes, credit guarantee coverage will be taken for all loans sanctioned under the United Shilpi Card scheme, as the credit limits come under the SSI sector.

For assessing the working capital requirement, the Nayak Committee's recommendation of considering 20% of the projected annual turnover may be applied in cases where it is applicable.