With the government formulating a new model under MUDRA scheme for providing credit to handloom sector under which it has combined elements of concessional credit such as margin money, interest subvention and credit guarantee cover, the textiles ministry yesterday said that it has set a target of extending MUDRA loans to five lakh handloom weavers in the next three years.

The ministry has requested every state and union territory to prepare a three-year action plan to achieve the five lakh target. The plan would cover all handloom clusters, with the aim of extending MUDRA loans to all eligible, willing, non-defaulting handloom weavers.

The plan would also identify banks for each cluster, keeping in view the presence of banks and their willingness to participate in the scheme.

Under the Pradhan Mantri Mudra Yojana (PMMY), loans ranging from Rs 50,000 to Rs 10 lakh are provided to small entrepreneurs. As of now, three products available under the PMMY are Shishu, Kishor and Tarun, to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur.

Textiles secretary Rashmi Verma said the government is paying special attention to skill upgradation of weavers, loom upgradation, ensuring availability of good quality raw material, providing better access to credit and branding of good quality handloom products. Availability of working capital is a critical component in enhancing earnings of weavers.