NHHF Pushes for Concessional Loans to Bolster Handloom and Handicraft Sector
The National Federation of Handlooms and Handicrafts (NHHF) has made a critical appeal to the National Bank for Agriculture and Rural Development (NABARD), urging the institution to extend working capital loans to weavers at a highly concessional interest rate of just 3 to 4 percent. This move is deemed essential for the survival and revival of lakhs of rural artisans across India, who are grappling with severe financial distress.
High-Level Meetings in Mumbai to Address Sectoral Demands
A delegation from the federation, led by NHHF president Macharla Mohan Rao and including members Bela Bhavanidas Sanghvi and B Teja Kranthi Reddy, met with senior officials of the Reserve Bank of India (RBI) and NABARD in Mumbai on Friday. The purpose of the meeting was to press a comprehensive charter of demands aimed at strengthening credit flow and institutional support to the handloom and handicraft sector. Both institutions have assured the NHHF delegation that their proposals will be examined on a priority basis, signaling a potential shift in policy focus.
Central Demand: Low-Interest Working Capital Loans
Rao emphasized that the demand for low-interest working capital loans is central to reviving the ailing sector. "We have requested NABARD to provide working capital loans at a differential rate of interest of 3 to 4 percent. This is essential to ensure that weavers and artisans can continue their occupation without falling into debt traps," he stated. Highlighting the gravity of the crisis, Rao pointed out that the handloom sector is the second-largest employer in rural India after agriculture, yet it remains financially fragile. "A majority of weavers are earning less than Rs 5,000 per month. The Covid pandemic severely disrupted their livelihoods, and many are yet to recover due to lack of institutional credit and rising input costs," he added.
Additional Demands to Strengthen the Sector
The federation has also put forth several other key demands to address systemic issues:
- Enhancement of per loom scale of finance: This is crucial to align with rising raw material and wage costs, preventing working capital shortages.
- Increase in cash credit limits for cooperative societies: To improve liquidity and operational efficiency.
- One-time settlement schemes for stressed handloom cooperative societies: Aimed at resolving existing debt burdens.
- Housing loans for weavers: To support their overall well-being and stability.
- Expansion of MUDRA-linked credit facilities: Facilitating easier access to micro-finance.
- Establishment of common service centres and raw material banks: To improve access to inputs and services, reducing dependency on middlemen.
- Measures to prevent exploitation by middlemen: Through production-cum-procurement centres and strengthened cooperative structures.
Positive Response from Financial Institutions
Rao reported that RBI officials acknowledged the need to improve credit flow to the non-farm rural sector, while NABARD expressed willingness to examine policy-level interventions. "The response from both RBI and NABARD was encouraging. We are hopeful of early decisions that will safeguard the livelihoods of millions dependent on handlooms and handicrafts," he concluded, expressing optimism for timely action to support this vital rural industry.
