VIRASAT – A CREDIT SCHEME FOR CRAFT PERSONS
Virasat launched for craft persons by the GOI provides term loans and finances artisans to the extent of 4% of the total financing
It is well known all across India that handloom and handicraft is major segment of the Indian economy. Though initially these were part of leisurely household activities, today they are of enormous significance in providing employment and their role in the growing GDP cannot be underestimated.
However, for the want of the investment capital, the artist or the handcrafters are always at the lower end.
Most of them are dependent on market sellers for the raw material as well as for selling their products where they do not find the profit margin that they deserve and due to these financial difficulties they struggle to meet their basic needs.
The credit scheme named “Virasat” launched for craft persons by the government of India provides term loans and finances artisans to the extent of 4% of the total financing. It provides them a chance to sell their products under marketing assistance schemes and it is implemented through state channelizing agencies also known as SCAs.
The scheme covers all the craftsmen belonging to the minority communities, including the Muslims, Christians, Sikhs, Buddhists, Jains, and Parsis.
Objectives of the Scheme
- To provide support to the handcrafters with a support to procure a capital investment at low interest rates.
- To remove the problem of lack of marketing investment.
- To make the craftsmen independent of the support they usually require from sellers.
- To make easy availability of credit flow for the craftsmen .
- To improve technology and methods to increase productivity.
- To promote them to make their products and packaging unique.
- Craftsmen belonging to Credit Line-1 and those who have an annual family income of Rs. 81000 in rural areas, and Rs. 1.03 lakh in urban areas.
- Those artisans participating in Hunar Haat exhibitions organised by NMDFC under USTTAD scheme of the Ministry of Minority Affairs will be preferred for the loan.
- If the artisan has already been sponsored under other credit schemes by the government, they will not be eligible to avail the loan under Virasat
Key Features of the Loan
- Maximum loan of up to Rs. 10 lakhs can be availed under this scheme.
- NMDFC provides 90% of the loan amount 10% is provided by the way or the craftsman and minimum 5% out of the 10% are provided by the craftsman.
- 6 months moratorium period is given to the artisan.
- Repayment begins in the next quarter after the expiry of the moratorium period.
- An interest of 5% per annum is levied on the loan. EMI includes principal plus the interest as per norms of the bank.
- One per cent discount is given to a woman artisan.
- Repayment period is a maximum of 5 years after the moratorium period.
- An insurance of the craftsmen against death and disability is arranged by the essay through an insurance provider for the entire duration of the loan.
How to Avail the Scheme
- Qualified applicants who wish to obtain a loan via the Virasat scheme may approach the NMDFC by contacting the corresponding SCA, who would usually have offices at the district level. Details of all SCAs are available online at www.nmdfc.org/index.aspx
- The program would be taken up by the Union Territory / State Government Appointed Channelizing Agencies (SCAs). The application form must be sent by the artisan at the SCA branch, which is usually established in the districts.
- SCA is responsible for providing all information on the loan to the craftsmen and the assistance necessary to complete the application form and submit the relevant documents.
- KYC documents are a mandate and bank accounts are required to be linked to the Aadhaar.
The scheme has been able to achieve its objectives and has proved to be of great advantage to the handcrafters.
- The handloom/handcrafts industry is the pivotal industry in India. When our artisans are independent, they get the incentives to greater productivity and channelize their energy into yielding the best of crafts which can find an enormous space in the Indian market.
- The handcrafters get the returns of their hard work directly without passing through sellers.
- Credit is given at a nominal rate of interest as compared to the exorbitant prices offered by market sellers.
- The loan securities are high and repayment period is up to 5 years which facilitates the handcrafter to set up their ventures.
- The SCAs must join up with the insurance broker to offer death and injury benefits to the artisans for the lifetime of the loan.
A self-reliant country would mean the greatest number of entrepreneurs in every sector and such government schemes make the economically weaker sections economically and morally independent, which ultimately will lead to a country of self-reliant individuals.