After being designated as the Regional Coordinator Bank for implementation of the Credit Guarantee Fund scheme, state's premier financial institution J&K Bank has been requested to act as a nodal agency to facilitate the increased flow of credit to the maximum number of artisans associated with the handicrafts industry.
"In order to ensure that the credit facility is extended to the artisans in handicrafts sector without any hassles, it is desired that J&K Bank may act as a Nodal Agency to facilitate the increased flow of credit to the maximum number of artisans in J&K state", reads the communiqué addressed to the Chairman of the J&K Bank from Director, Government of India, Ministry of Textiles.
Precisely, the scheme is in place to alleviate the problem of collateral security and impediment to flow of credit to small and tiny industries sector, including artisans associated with the handicrafts sector.
Credit Guarantee Fund Scheme (CGFS) is to cover credit facilities extended to small-scale industries, handicrafts included, by the banks. The guarantee cover under the CGFS is available, in respect of a single eligible borrower, not exceeding Rs.50 lakh by way of term loan and/or working capital facilities on or after entering into an agreement with the Trust, to the small scale industrial units including information technology and software industries, without any collateral security and/or third party guarantees.