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Weavers Credit Card Scheme – How to Apply

Weavers Credit Card Scheme

Weavers Credit Card Scheme

The weavers credit card scheme aims to provide easy access to financing for weavers and ancillary workers involved in weaving activities in the handloom sector. The weaving industry in India generates tremendous employment right after the agricultural industry. With majority of the industry still being unorganized and filled with micro businesses, the government has introduced a specialised scheme for financing weavers and workers involved in the weaving industry. In this article, we look at the salient features of the weavers credit card scheme.


Under the weavers credit card scheme, financing is provided for purchase of tools and equipment required for carrying out weaving activity and working capital requirement. All weavers and ancillary workers involved in weaving industry is eligible for loan under this scheme. However, preference is given to weavers identified under Third Census of Handloom weavers conducted by Development Commissioner, Ministry of Textile as well as to weavers identified by State Governments and weavers who have formed Society/Self Help Group (SHGs)/Joint Liability Groups (JLGs).

Amount of Loan

Existing weavers or new weavers having photo identification card issued by Development Commissioner (Handloom) or the State Government is a necessary pre-condition for availing the weavers credit card. A maximum of Rs.2 lakhs is provided as a term loan or cash credit facility under this scheme. Existing customers of bank enjoying credit facility and having satisfactory record are given preference in sanctioning of loan.

Interest & Repayment

The rate of interest on weavers credit card is linked to the bank base rate. The borrower is required to provide a margin of 20% of the loan amount, in case of loan above Rs.25000. For loan below Rs.25000, there is no margin requirement.

Limit sanctioned under the weavers credit card is repayable over a three year period, in case of term loan. Working capital facility is sanctioned for a three year period, subject to annual review.

Benefits of the Weavers Credit Card

The following are some of the major benefits of the weavers credit card scheme:

  • No collateral security is required.
  • No requirement to submit financial statements for purpose of annual review of sanction.
  • Cash support is offered to weavers in the form of margin money support of upto Rs.42000 per weaver and/or interest subsidy of upto 3% on bank loan and/or reimbursement of one-time guarantee fee as applicable (1% at present) and annual service charges as applicable (0.50% at present) for a period upto 3 years payable for guarantee cover under CGTMSE.

How to Apply for Weavers Credit Card

All nationalised banks in India operate the weavers credit card scheme. Hence, application in the format attached can be made to the branch of any bank. The following documents must be provided along with the application.

  1. Proof of identity – Voter’s ID Card/ Passport/ Driving License/ PAN Card/ signature identification from present bankers of proprietor, partner or Director (if a company).
  2. Proof of residence – Recent telephone bill, electricity bill, property tax receipt/ passport/ Voter’s ID Card of proprietor, partner or Director (if a company).
  3. Proof of business address
  4. Proof of Minority
  5. Last three years balance sheets of the units along with income/sales tax returns etc. For cases below fund-based limits of Rs.25 lacs if audited balance sheets are not available, then unaudited balance sheets are also acceptable as per extant instructions of the bank. For cases of Rs.25 lacs and above, the audited balance sheets are necessary.
  6. Memorandum and articles of association of the Company/ Partnership Deed of partners etc.
  7. Assets and liabilities statement of promoters and guarantors along with latest income tax returns.
  8. Rent Agreement (if business premises on rent) and clearance from pollution control board if applicable.
  9. SSI registration if applicable.
  10. Projected balance sheets for the next two years in case of working capital limits and for the period of the loan in case of term loan.
  11. In case of takeover of advances, sanction letters of facilities being availed from existing bankers/ Financial Institutions along with detailed terms and conditions.
  12. Profile of the unit (includes names of promoters, other directors in the company, the activity being undertaken, addresses of all offices and plants, shareholding pattern etc.
  13. Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, from whom to be acquired, price, names of suppliers, financial details like capacity of machines, capacity utilization assumed, production, sales, projected profit and loss and balance sheets for the next 7to 8 years till the proposed loan is to be paid, the details of labour, staff to be hired, basis of assumption of such financial details etc.
  14. Review of account containing month wise sales (quantity and value both), production (quantity and value), imported raw material (quantity and value), indigenous raw material (quantity and value), value of stocks in process, finished goods (quantity and value), debtors, creditors, bank’s outstanding for working capital limits, term loan limits, bills discounted.
  15. Photocopies of lease deeds/title deeds of all the properties being offered as primary and collateral securities.
  16. Position of accounts from the existing bankers and confirmation about the asset being Standard with them (In case of takeover).
  17. Manufacturing process if applicable, major profile of executives in the company, any tie-ups, details about raw material used and their suppliers, details about the buyers, details about major competitors and the company’s strength and weaknesses as compared to their competitors etc.

Download Weavers Credit Card Scheme Application