Star Weaver Mudra Scheme: Meaning, Purpose, Objectives and Eligibility, and Required Documents

The Star Weaver Mudra Scheme is a government-backed financial initiative introduced by the Bank of India to support traditional handloom weavers across India. This scheme is part of the broader Mudra Yojana, which aims to provide affordable credit facilities to micro and small enterprises engaged in various traditional and rural trades.

Specifically designed for handloom weavers, the scheme offers working capital and term loan assistance to help artisans modernise equipment, purchase raw materials, and expand their weaving operations. It supports both existing and new weavers by providing easy access to credit with minimal documentation and flexible repayment terms. The scheme promotes employment generation, preserves traditional crafts, and encourages entrepreneurship within the handloom sector.

By empowering weavers through financial inclusion, the Star Weaver Mudra Scheme contributes to the economic development of rural communities and supports the preservation of India’s cultural heritage.

Star Weaver Mudra Scheme - Purpose

The primary purpose of the Star Weaver Mudra Scheme is to financially empower individual weavers and weaving groups by offering them credit assistance for their business needs. The scheme aims to uplift traditional artisans who often lack access to formal financial services due to their rural locations or informal business structures.

This scheme provides both working capital and term loans for the purchase of raw materials, handloom equipment, accessories, and other operational expenses required for weaving and textile production. By doing so, it helps improve productivity, ensure steady income, and reduce dependency on high-interest informal credit sources.

Additionally, the scheme supports skill development and enterprise growth in the handloom sector. It encourages self-reliance among weavers, boosts employment opportunities, and promotes the continuation of India’s handloom traditions. Through structured financial assistance, the Star Weaver Mudra Scheme works towards bridging the gap between artisan communities and organised financial services. If you’re looking for faster access to funds, you can also check your pre-approved business loan offer, which might give you the flexibility to secure financing without delays.

Star Weaver Mudra Scheme - Eligibility

To avail benefits under the Star Weaver Mudra Scheme, applicants must meet specific eligibility criteria defined by the Bank of India. These ensure that the financial assistance reaches the intended beneficiaries within the handloom sector.

• The applicant must be an individual handloom weaver or part of a registered weavers’ group or society.
• Both existing and new weavers engaged in weaving-related activities are eligible.
• The weaver should possess a Weaver’s Identity Card issued by the Development Commissioner (Handlooms) or relevant state authority.
• The unit should be involved in weaving, dyeing, warping, or related textile activities.
• A clean repayment record is required if the applicant has availed any previous loans.
• Preference may be given to SC/ST/OBC/weaver women and artisans under the PMEGP or similar schemes.

Star Weaver Mudra Scheme - Rate of interest

The Star Weaver Mudra Scheme offers loans at competitive interest rates to make credit affordable for small-scale handloom entrepreneurs. As per Bank of India guidelines, the rate of interest is linked to the MCLR (Marginal Cost of Funds Based Lending Rate) and is designed to remain lower than regular commercial loan rates.

Typically, the interest rate applicable under this scheme starts from the base lending rate of the bank, with possible concessions for timely repayments and priority sector classification. The aim is to ensure that weavers do not fall into debt traps from high-cost borrowings and instead benefit from structured and predictable repayment schedules.

The rate may vary depending on the applicant's credit profile, loan amount, and tenure. Additionally, government interest subvention or interest reimbursement may apply under specific conditions, further reducing the burden on borrowers and supporting credit inclusion among rural weaver communities.

Star Weaver Mudra Scheme - Documents

To apply under the Star Weaver Mudra Scheme, applicants must provide specific documents to verify their identity, business activity, and eligibility. The documentation process is kept minimal to ensure accessibility for rural weavers and artisans.

Commonly required documents include:

• Duly filled loan application form.
• Weaver’s Identity Card issued by the Handloom Commissioner or state authority.
• Proof of identity (Aadhaar card, Voter ID, etc.).
• Proof of address (utility bill, ration card, etc.).
• Two recent passport-size photographs.
• Quotation for the equipment or raw materials to be purchased, if applicable.
• Bank passbook or cancelled cheque for account verification.

These documents help the bank assess the applicant’s profile, confirm weaving activity, and sanction the loan swiftly under the guidelines of the scheme.

Star Weaver Mudra Scheme - Nature and extent of loan

The Star Weaver Mudra Scheme offers both working capital and term loan assistance to handloom weavers. The nature of the loan can be need-based, depending on the business requirements of the applicant. This can include the purchase of handloom machinery, raw materials like yarn and dyes, or expenses for business expansion and operations.

The extent of the loan is capped under the Mudra loan framework, generally up to Rs.10 lakh, with categorisation into three segments—Shishu (up to Rs.50,000), Kishore (Rs.50,001 to Rs.5 lakh), and Tarun (Rs.5 lakh to Rs.10 lakh). The actual loan amount sanctioned depends on the business plan, past credit history, and repayment capacity of the applicant.

No collateral security is required under this scheme, making it highly beneficial for rural artisans who lack formal assets. Additionally, loans are supported by the Credit Guarantee Fund for Micro Units, ensuring safety for the lending institution.

Steps to apply for Star Weaver Mudra Scheme

Applying for the Star Weaver Mudra Scheme is a straightforward process, designed to accommodate the needs of rural weavers. Follow these steps to apply through the Bank of India or its designated branches.

• Visit the nearest Bank of India branch and inquire about the Star Weaver Mudra Scheme.
• Collect the application form or download it from the Bank of India’s official website.
• Fill in the required details, including personal, financial, and business-related information.
• Attach necessary documents such as Weaver’s ID, Aadhaar, address proof, and business quotations.
• Submit the completed application to the branch officer for verification and further processing.
• Await the loan appraisal and approval, which will be based on eligibility and credit assessment.
• Once sanctioned, the loan amount will be disbursed directly to your bank account.

Bank officials may also assist with filling out the form and explaining repayment terms, making the process more accessible to rural applicants.

Conclusion

The Star Weaver Mudra Scheme plays a vital role in promoting financial inclusion among India’s traditional handloom weavers. By offering affordable, collateral-free loans tailored to the needs of rural artisans, the scheme fosters entrepreneurship, preserves heritage crafts, and strengthens local economies. If you're ready to invest in new equipment or scale up your operations, checking your business loan eligibility can provide you with additional financial resources to fuel your business.

Whether you’re starting a new weaving unit or upgrading existing equipment, timely credit access can be a game-changer. If you’re looking to invest in tools, expand operations, or meet working capital needs, a business loan can provide the necessary support. Backed by government initiatives like the Star Weaver Mudra Scheme, aspiring weavers can build sustainable livelihoods and contribute to India’s vibrant textile sector.