Q1: What is the objective of this scheme?

A: The scheme provides financing for various agricultural and allied activities, including working capital, post-harvest expenses, produce marketing loans, consumption requirements, and investment credit.

Q2: Who is eligible to apply for a loan under this scheme?

A: Owner cultivators, tenant farmers, oral lessees, sharecroppers, SHGs, JLGs, etc. are eligible to apply for a loan.

Q3: What types of facilities are available for financing under the scheme?

A: The scheme offers Kisan Credit Cards and term loans.

Q4: What is the validity period of the Kisan Credit Card?

A: The limit is valid for five years, subject to annual review.

Q5: What is the repayment period allowed under this scheme?

A: The repayment period varies depending on the anticipated harvesting and marketing period for the crops for which the loan has been granted. The repayment period for term loans is determined based on the type of investment. For fisheries and animal husbandry, the loan is in the form of a revolving cash credit limit, and repayment is fixed according to the borrower's cash flow/income generation pattern.

Q6: What is the margin required for financing under the scheme?

A: No specific margin is necessary for production credit financing. However, the margin varies with the purpose of investment for investment credit financing. Nevertheless, no margin is required for loans up to Rs. 1.60 lahks.

Q7: What benefits does the Government of India provide to improve financing under the KCC?

A: The Government offers a 2% interest subvention and a 3% prompt repayment incentive on KCC loans (i.e. crop loan + working capital loan for animal husbandry and fisheries). This benefit is available on an overall limit of Rs. 3 lahks per annum and subject to a maximum limit of Rs. 2 lahks per farmer involved in activities related to animal husbandry and/or fisheries.

Q8: What are the security norms for financing under the Kisan Credit Card?

A: For limits up to Rs. 1.60 lakhs, and limits up to Rs. 3 lahks (in case of tie-up), the security required is the hypothecation of crops. For limits above the specified norms, a mortgage of land/third-party guarantee in addition to hypothecated crops/assets is required.

Q9: What documents are required for applying for a loan?

A: The necessary documents for loan application are a duly filled and signed application form, passport-size photograph, Aadhaar card copy, photo identity/address/signature proof, PAN card/Form 60, land details such as IB, Pahani, Khasra, 7/12-Satbara extract, Patta as per state government provisions, a declaration on the availability of crop insurance, declaration of availing of Personal Accident Insurance Scheme (PAIS), tie-up agreement in case of tie-up arrangements, security or other documents wherever applicable, and a land valuation report and legal opinion from an empanelled valuer/advocate wherever applicable.

FAQs of SHGs

What is the purpose of this scheme?

A. The scheme aims to provide loans to Self Help Groups (SHGs) meet emergent requirements, purchase assets, and engage in income-generating activities. The loans can be used for social needs, debt swapping, housing construction or repair, constructing toilets, and undertaking sustainable livelihood activities. The loans can also be used to finance viable common activities started by the SHGs.

What are the eligibility criteria for applying for a bank loan?

A. The SHG must be in active existence for at least 6 months as per the books of accounts of the SHG. The SHG should be practising Panchasutras, which include regular meetings, savings, inter-loaning, timely repayment, and up-to-date bookkeeping. The group should have 10-20 members, and in special cases such as groups in difficult areas, disabled persons, and remote tribal areas, the minimum number of members in the group must be 5 persons. The SHG must also meet the grading norms fixed by NABARD and score a minimum rating of 70 marks as per the grading sheet.

What types of facilities are available for finance under this scheme?

A. SHGs can avail themselves of either a Term Loan (TL) or a Cash Credit Limit (CCL) loan, or both, depending on their needs.

What is the quantum of the loan under this scheme?

A. According to the operational guidelines issued by NABARD, SHGs may be sanctioned savings-linked loans by banks ranging from a saving-to-loan ratio of 1:1 to 1:6 in the first phase, depending on the assessment of the SHG, subject to a minimum of Rs.1 lakh per group. However, in the subsequent phases of credit linkage, banks may give loans beyond the limit of six times the savings as per the discretion of the bank, depending on the assessment of the SHG.

What is the repayment period allowed under this scheme?

A. In the case of a term loan, the repayment period varies from 36 months to 84 months, depending on the number of linkages and the type of activity.

What are the security norms for financing SHGs?

A. For loans to SHGs up to Rs.10 lakhs, no collateral security is required. For loans to SHGs above Rs.10 lakhs and up to Rs.20 lakhs, the entire loan (irrespective of the loan outstanding, even if it subsequently goes below Rs.10 lakhs) will be eligible for coverage under the Credit Guarantee Fund for Micro Units (CGFMU).

What documents are required for applying for the loan?

A. The required documents include a duly filled and signed application, a resolution/loan authorization letter from the members of the group, an inter-se agreement executed by all members of the SHG, records related to group maintenance such as savings register, loan register, minutes register, internal lending register, attendance register, etc., a micro-credit plan prepared by the SHGs and appraised by the Federations/Support agency (from the 3rd linkage onwards), recommendations from SRLM/SHPI, KYC documents of the members of the group, and passport photos of the members of the group.

3 . Gold loans

What is the purpose of the gold loan scheme?

A: The gold loan scheme allows borrowers to pledge their gold as collateral to meet their financial needs related to agriculture, other priority, and non-priority sectors.

Who is eligible to apply for the loan under this scheme?

A: Individual and joint customers aged above 18 years are eligible to apply for finance under this scheme.

What types of facilities are available for finance under this scheme?

A: Term loans, cash credit, and overdraft loans are available.

What is the quantum of the loan provided under this scheme?

A: The loan amount is determined based on the rate per gram fixed by the bank for 22 carats or 75% of the appraised value or the loan amount requirement of the borrower, whichever is lesser.

What is the repayment period allowed under this scheme?

A: The principal repayment schedules can be fixed at monthly, quarterly, half-yearly, yearly instalments, or bullet repayment depending on income generation and/or seasonality.

Can I pledge gold coins to avail of a gold loan?

A: Yes, you can pledge special gold coins sold by the bank for a maximum limit of 50 gm per customer.

Do I need to be an existing customer of the bank to take a gold loan?

A: No, you do not need to be an existing customer of the bank. A gold loan can be sanctioned to a new borrower by opening a savings bank account.

Do I need a guarantor to avail of the gold loan?

A: No, a guarantor is not required.

Can I make part payments towards the loan against gold?

A: Yes, you can make part prepayments any number of times during the tenure of the loan.

What are the documents required for applying for a gold loan?

A: The documents required are a duly filled and signed application form, passport-size photographs, proof of agricultural land records/allied agricultural activity/business activities (wherever applicable), photo identity, address and signature proof, and PAN card/Form 60.

5 . Purchase of land for Agriculture purposes

What is the purpose of the scheme?

The scheme intends to provide term loans to small/marginal farmers, including sharecroppers/tenant cultivators, to purchase agricultural land or fallow/wasteland for development and cultivation, to increase production/productivity.

What are the eligibility criteria for the loan?

The farmer should be classified as a small farmer (owning 5 acres of non-irrigated land or 2.50 acres of irrigated land) even after purchasing the proposed land.

What types of facilities are available under the scheme?

Only term loans are available under this scheme.

What is the margin requirement?

The minimum margin requirement is 20%.

What is the maximum loan amount under this scheme?

The maximum loan amount is Rs. 10.00 lakhs.

What are the security requirements for the loan?

The land proposed to be purchased must be mortgaged, regardless of the loan amount, as it serves as primary security. Additionally, if the borrower has any presently owned land, that must also be mortgaged as collateral security.

What is the repayment period for loans under the scheme?

The loan must be repaid in a maximum of 10 years, in half-yearly/yearly instalments, with a maximum moratorium period of 24 months.

6 . Farm Transport Scheme

What is the purpose of the scheme?

A. The scheme is intended to provide term loans to agriculturists with sizable own land to purchase new two/three/four wheelers/trucks/jeeps/pickup vans, refrigerated vans, delivery vehicles, mini trucks, vehicles with trolleys, etc.

Who are eligible for applying for the loan under the scheme?

A. The applicant should be an agriculturist with a sizeable own land, and their age should not exceed 70 years.

What type of facilities are available for finance under the scheme?

A. Term loan.

What are the margin requirements?

A. The margin requirements are 15% of the cost of the vehicle, and all other charges and taxes, such as insurance charges and registration charges, are to be borne by the applicant.

What is the maximum quantum of loans under this scheme?

A. The maximum loan amount is 85% of the cost of the vehicle (ex-showroom price), excluding insurance charges and registration charges, subject to a maximum of Rs. 1.00 lakh for two-wheelers, Rs. 5.00 lakhs for three-wheelers, and Rs. 25.00 lakhs for four-wheelers.

What are the security requirements for the loan under the scheme?

A. For loans up to Rs. 1.60 lakhs, hypothecation of the vehicle and accessories are required, while for loans above Rs. 1.60 lakhs, hypothecation of the vehicle and accessories, mortgage of land (accepted value of land should be more than 50% of the loan amount), and/or third-party guarantee (should not be less than 100% of the loan amount) is required.

What is the repayment tenor for the loan financed under the scheme?

A. The repayment tenor for two-wheelers is a maximum of 3 years, for three-wheelers is a maximum of 5 years, and for four-wheelers is a maximum of 7 years, including a maximum moratorium period of 6 months. The repayment schedule can be fixed based on the cash flow, such as monthly, quarterly, or half-yearly instalments coinciding with the surplus available with the farmer after harvesting/marketing of agricultural produce or otherwise based on cash flow.

Is the bank's hypothecation charge on the vehicle registered with RTA necessary?

A. Yes, the bank's hypothecation charge on the vehicle should be registered with RTA, and it should be ensured that the bank's lien is recorded in the registration book.

What is the list of documents required for applying for the loan?

A. The list of required documents includes a duly filled and signed application form, passport-sized photographs, photo identity, address and signature proof, PAN card/Form 60, driving license of borrower/driver, quotation of the vehicle issued by the dealer to the customer, proof of land holding, land valuation report from an empanelled valuer (wherever applicable), past loan track record of the customer (wherever applicable), and security or other documents (wherever applicable).

7 . Agri infrastructure fund scheme

What projects are covered under the scheme?

A: The scheme covers post-harvest management projects such as e-marketing platforms, warehouses, silos, pack-houses, sorting & grading units, cold chain, logistics facilities, primary processing centres, and other viable projects for building community farming assets.

Are processing units covered under the scheme?

A: The scheme is limited to primary processing units, while advanced processing activities are not covered. However, some components of processing units such as warehouses, cold storage, pack-houses, collection centres, etc. can benefit from the agriculture infrastructure fund.Animal Husbandry Infrastructure Development (AHIDF) scheme

What is the implementation period of the scheme?

A: The scheme will be operational from 2020-21 to 2032-33, and the loan disbursement period will be between 2020-21 and 2025-26. Interest subvention and credit guarantee for the loan will be applicable only for 7 years from the date of the first loan disbursement.

What is the interest subvention cost borne by the Government?

A: All loans up to a limit of Rs. 2 crores under this financing facility will have an interest subvention of 3% per annum. This subvention will be available for a maximum period of 7 years. In case of loans beyond Rs.2 crores, the interest subvention will be limited up to Rs. 2 crores.

What is the moratorium period for the project under the scheme?

A: The moratorium period will vary from project to project, and it ranges from a minimum of six months to a maximum of two years.

Is subvention allowed during the moratorium period of the project?

A: Yes, the subvention will be available for a maximum period of seven years, which also includes the moratorium period. (Overall availability for subvention is 7 years).

What is the minimum or maximum loan quantum under the AIF scheme?

A: The scheme does not have a minimum or maximum loan cap, but the maximum loan quantum on which the benefit of the scheme is applicable is up to Rs.2 crores.

What is the credit guarantee coverage available for eligible farmers?

A: Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crores. The fee for this coverage will be paid by the Government. In the case of FPOs, the credit guarantee may be availed from the facility created under the FPO promotion scheme of DAC&FW.

Who can avail of financing under this scheme?

A: The eligible entities under this project are Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Groups (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public Private Partnership Projects.

8 . Animal Husbandry Infrastructure Development (AHIDF) scheme

What is AHIDF?

The Animal Husbandry Infrastructure Development (AHIDF) is a scheme under the Prime Minister’s Atma Nirbhar Bharat Abhiyan stimulus package to incentivize investments in the dairy processing and value addition infrastructure, meat processing and value addition infrastructure, and animal feed plant with a budget allocation of Rs. 15000 crores.

Who is eligible for AHIDF?

Entities such as Farmer Producer Organizations (FPO), private companies, individual entrepreneurs, Section 8 companies, and Micro, Small, and Medium Enterprises (MSME) are eligible for AHIDF.

What activities can be covered under the Dairy sector?

The establishment of new units and strengthening of existing dairy processing units with quality and hygienic milk processing facilities, packaging facilities, or any other activities related to dairy processing can be covered under the Dairy sector.

What activities can be covered under the Meat sector?

The establishment of new meat processing units and strengthening of existing meat processing facilities for sheep/goat/poultry/pig/buffalo in rural, semi-urban, and urban areas, large-scale integrated meat processing facilities/plant/unit can be covered under the Meat sector.

What activities can be supported related to animal feed?

Establishment of Animal Feed manufacturing and strengthening of existing units/plants of the following categories: Establishment of Mini, Medium and Large Animal Feed Plant, Total Mixed Ration Block Making Unit, By-pass protein unit, Mineral Mixture Plant, Enrich Silage making unit, Animal Feed Testing Laboratory, and any other activities related to animal feed manufacturing can be supported under the animal feed category.

What is the loan amount for a beneficiary under AHIDF?

The project under the AHIDF is eligible for a loan of up to 90% of the estimated/actual project cost on submission of viable projects by eligible beneficiaries.

What is the beneficiary contribution?

The beneficiary contribution could be 10% in the case of Micro and Small units as per MSME defined ceiling, while in the case of Medium Enterprises, the beneficiary contribution could go up to 15%. The beneficiary contribution in other categories of enterprises could go up to 25%.

What is the lending rate of interest?

The lending rate should not exceed 200 basis points plus an External Bench Mark Based Lending Rate (EBLR) for the Eligible Entities whose project cost falls within MSME-defined ceilings. However, the rate of interest for other projects could be based on the commercial interest rates of the bank.

What is the interest subvention provided by GOI?

Interest subvention of 3% is provided to all eligible entities. However, interest subvention will not be allowed for the loan sanctioned for the procurement of land, working capital, old machinery, and vehicles for personal use. The Eligible Entities will not be able to get the interest subvention if the Eligible Entities are a defaulter of repayment of the loan amount in any given year.

Is any credit guarantee provided under the scheme?

Yes, a credit guarantee will be provided only for those projects which are viable and are covered under MSME-defined ceilings. The guarantee coverage would be up to 25% of the credit facility available to the borrower. The Credit Guarantee will not be provided to other beneficiaries who are not covered under MSME norms, however, those EEs will be eligible to get interest subvention.

What is the maximum repayment period?

The Scheduled Bank shall ensure that the maximum repayment period should not exceed 10 years from the date of the first disbursement inclusive of a moratorium of 2 years on the repayment of principal.

9 . Prime Minister formalization of Micro Food Processing Enterprises scheme

What does PM FME Scheme mean?

The acronym PM FME stands for Prime Minister Micro Food Processing Enterprises. It is a Centrally Sponsored Scheme with a budget of Rs. 10,000 crores, which aims to provide support to 2,00,000 micro food processing enterprises across India for 5 years (2020-21 to 2024-25). The scheme is being implemented by MOFPI.

Is there any initial investment required for the scheme?

Yes, the applicant needs to contribute 10% of the project cost.

Who are eligible borrowers under the scheme?

Eligible borrowers include Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), Cooperatives, existing micro food processing entrepreneurs, and new units (individuals or groups) that are focused on only one district and one product.

Are there any eligibility criteria for individual micro-enterprises?

Yes, there are. The enterprise should be unincorporated and employ less than 10 workers. The applicant should be at least 18 years of age and possess a minimum educational qualification of VIII standard pass. Only one person from a family (including self, spouse, and children) can obtain financial assistance.

What is the eligible quantum of the loan under the scheme?

The project under the PM FME scheme can receive a loan of up to 90% of the estimated or actual project cost on submission of viable projects by eligible beneficiaries.

What is the Credit Linked Grant/Subsidy under the scheme?

The scheme provides the following credit-linked grants and subsidies:

• Credit-linked grant of 35% for existing micro food processing enterprises, subject to a maximum of Rs. 10 lahks.
• Credit-linked capital investment grant of 35% to FPOs/SHGs/Cooperatives.
• Credit-linked grant of 35% for common infrastructure development by groups, government agencies, or private entities.

What are the collateral security guidelines under the scheme?

For limits up to Rs. 10 lakhs, no collateral is required. Eligible units need to be covered under CGTMSE or CGFMU (in case of SHG), otherwise, a mortgage of immovable property and/or pledge of specified financial assets (Deposits, LIC, NSC, etc.) has to be obtained.

What is the repayment period specified as per the guidelines of the scheme?

The term loan component will be repayable within 10 years, inclusive of a moratorium period of 1 year, depending on the type of activity/investment in line with the projected cash flows.