Farming is the backbone of India’s economy. Hence to support this vital sector, the government offers various loan schemes specifically designed for farmers. These loans primarily aim to provide financial assistance to farmers across different categories and help them enhance productivity, adopt modern techniques, and improve their livelihoods. In this article, we explore some of the best government loans for farmers in India.
Government loans for farmers are integral to promoting agricultural growth, ensuring food security, and improving rural livelihoods. These loans provide financial assistance to small, marginal, and large farmers, enabling them to invest in agriculture-related activities and cope with various challenges.
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List of 14 Government Loans for Farmers in India
1. Pradhan Mantri Kisan Credit Card (PM-KCC)
The PM-KCC is a revolutionary scheme that provides farmers with a credit card specifically designed for their needs. It simplifies access to credit by offering flexible and timely credit to meet agricultural expenses. The card covers both short-term and long-term credit needs and provides interest subsidies for timely repayment.
2. Kisan Credit Card (KCC)
The Kisan Credit Card scheme was initiated to provide affordable credit to farmers for crop production, post-harvest expenses, and allied agricultural activities. It offers hassle-free access to credit with minimal documentation. Farmers can avail themselves of working capital, term loans, and crop loans through this card.
3. Pradhan Mantri Fasal Bima Yojana (PMFBY)
Crop insurance is vital for farmers facing the risks of unpredictable weather and crop failure. The PMFBY aims to provide affordable crop insurance coverage to farmers against natural calamities, pests, and diseases. This scheme ensures that farmers receive compensation for their losses, helping them recover and continue farming without financial distress.
4. Interest Subvention Scheme for Short-Term Crop Loans
The government’s interest subvention scheme reduces the financial burden on farmers by providing interest rate concessions on short-term crop loans. Under this scheme, farmers who repay their loans promptly are eligible for an interest subvention, encouraging timely repayment and reducing the cost of borrowing.
5. NABARD Loans for Agriculture and Rural Development
The National Bank for Agriculture and Rural Development (NABARD) offers a range of loan schemes to support agriculture and rural development. These loans encompass diverse areas such as farm mechanization, agri-infrastructure, dairy farming, and sustainable agriculture practices. NABARD loans play a crucial role in fostering innovation and modernization in Indian agriculture.
In addition to the above-mentioned places of government loans for farmers, there are also several government and private banks that provide funding for greenhouse and farming activities.
List of Government and Private Banks in India That Provide Loand for Farmers
State Bank of India provides financial assistance for greenhouse or poly house farming. Generally, you can get loans for the development of fruit orchards like Mangoes, Chikoos, Grapes, Pomegranates, Apples, etc. Additionally, you can apply for a short-term loan for the crops like bananas, pineapples, and Flowers in open and greenhouses culture.
The loan repayment starts after the completion of the gestation period varying from 4 to 7 years for different crops. Repayment commences from the time the crop gives economic yield and is linked to the income generation of each crop every year and varies between 7 to 12 years. You will need to contact your nearest SBI branch for applying for the loan.
Also Read: Best Agriculture Business Ideas
7. Cent Poly House, Green House, Shade Net House Scheme
Central Bank of India provides need-based financial assistance for undertaking protected farming of various high-quality commercial horticulture crops. The crop list includes Flowers, Vegetables, Fruits, Medicinal Plants, Spices, etc.
You can apply for a loan for the construction/erection of Green Houses, Poly Houses, Shade Nets, etc., purchase and installation of necessary components, and working capital. The quantum of the loan is up to 80% of the project cost, a maximum of Rs.5 Crore.
8. Punjab National Bank
PNB (Punjab National Bank) provides financial assistance for the construction of the greenhouse and poly house. Additionally, you apply for loans for the purchase of equipment, machinery, etc.
Generally, the bank may ask for the hypothecation of a greenhouse/poly house, machinery, and equipment as primary security. In addition to that, you will need to submit collateral security against your loan amount.
9. ICICI Bank
ICICI Bank offers a wide range of products for agriculture and farming business. Additionally, you can use the overdraft facility to meet the cost of cultivation and working capital activities for farming and allied activities.
Broadly, there are two different types of finance facilities. These are the Kisan Credit Card and Agri Term Loan. Generally, the KCC is perfect for the daily basis need for finance and the term loan is perfect for financial assistance for a long duration of time.
10. Bank of Baroda
If you have your own land for cultivation, you can apply for a loan from the Bank of Baroda. Depending upon the cost of the project and subject to assessment as per the bank, the bank approves the loan amount. Additionally, you can avail of a repayment time for a maximum of 15 years. However, you must show sufficient income to the bank for repaying the installments.
11. IDBI Bank Agriculture Loan
IDBI Bank offers a wide range of loans for the development of agriculture and allied industry. Some of the major items are Crop Loans, Kisan Credit Cards, warehouse finance, funding for agriculture land purchases, building infrastructure, etc.
The bank extends financial assistance to individual farmers or groups of farmers for the Activities relating to the establishment/ maintenance of the Nurseries of ornamental plants and trees, orchards, and quick-growing trees and shrubs.
12. HDFC Bank Agricultural Loan
There are several different loan products you can apply for from HDFC Bank. Broadly, the bank provides crop loans, warehouse receipt finance, bill discount, and current account.
The bank provides the term loan for a variety of purposes including the development of commercial horticulture, and the establishment of orchards, and plantations. However, the bank will verify the project feasibility report before sanctioning the loan.
13. Axis Bank Agriculture Loan
Axis Bank provides horticulture loans to facilitate farmers with credit for the purchase of Inputs, machinery, poly houses, drip irrigation installation, domestic consumption, etc. Currently, the bank has a wide branch network even in rural areas. So, you can contact the nearest branch for getting further details.
14. Union Bank of India
UBI provides funding for the greenhouse project as “Union Biotech. The product is aimed especially at financing for setting up of Tissue Culture laboratories and also poly houses on a commercial scale. In recent years, the demand for Tissue Culture Plantlets of elite plant varieties has grown tremendously in domestic as well as foreign markets. And in most cases, it needs a protected farming facility.
As of now, there is now an online loan application facility as such. Therefore, you will need to visit the bank branches for applying for an agriculture loan for a greenhouse or poly house. We hope this list of loan providers will help you definitely in getting funding assistance.