NABARD Scheme

• Providing support by refinancing or funding
• Building infrastructure in rural areas
• Preparing credit plans at the district level
• Guiding the banking sector in achieving their credit targets
• Supervising Regional Rural Banks (RRBs) and Cooperative Banks
• Designing new projects for rural development
• Implementing Government’s development schemes
• Training handicraft artisans

Also Read: Small Scale Industries: Registration Process, Features, Benefits

Further, let’s discuss some key financial functions offered by NABARD scheme.

• Providing financing services for the improvement and development of rural India
• Organizing and managing funding programs for agriculture and farming activities
• Policymaking for rural financial institutions
• Providing funding services for the development of food parks and food processing units in designated food parks
• Offering lending services to warehouse and cold chain and cold storage infrastructure
• Providing short-term and long-term refinance services to its customers also providing direct refinance services to cooperative banks
• Offering credit facilities to marketing federations
• Specialises in providing long-term irrigation and rural infrastructure development funds

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1) Refinance – Short Term Loans

Short-term loans or crop loans are offered by various financial institutions to farmers for the purpose of crop production. By providing this loan, one can assure food security in the country. For seasonal agricultural operations, NABARD has sanctioned a short-term credit loan of amount Rs. 55,000 cr to several financial institutors in the financial year of 2017-18.

2) Long Term Loans

Long-term loans are provided to financial institutions for various farm and non-farm-related activities. The tenor of the long-term loan is from 18 months to a maximum of 5 years. NABARD has refinanced around Rs. 65,240 cr for financial institutions in the FY 2017-18 that also include concessional refinance of Rs. 15,000 cr to Corporative banks and Regional Rural Banks (RRBs).

3) Rural Infrastructure Development Fund (RIDF)

Rural Infrastructure Development Fund was introduced by RBI considering the shortfall in lending to the priority sector for supporting rural infrastructure projects.  The primary focus of this fund is the rural infrastructure development in India and under this fund, the amount disbursed was Rs. 24,993 cr in the FY 2017-18.

4) Long-Term Irrigation Fund (LTIF)

This fund was introduced mainly to provide funding for 99 irrigation projects by initiating an amount of Rs. 20,000 cr. Post the amount sanctioning of 99 projects, there were two additional projects introduced named as ‘North Koel Reservoir Project’ from Bihar and Jharkhand and ‘Polavaram National Project’ from Andhra Pradesh.

5) Pradhan Mantri Awaas Yojana -Grameen (PMAY-G)

Under this yojana, National Rural Infrastructure Development Agency (NRIDA) received an amount of Rs. 9000 cr that plans to build a pucca house, with all the basic amenities, for needy households by the year 2022.

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6) NABARD Infrastructure Development Assistance (NIDA)

NABARD Infrastructure Development Assistance (NIDA) is a special program initiated to provide credit to financially well-to-do state-owned institutions and corporations.

7) Warehouse Infrastructure Fund

Warehouse Infrastructure Fund provides scientific warehousing infrastructure for agricultural commodities. An initial loan of the amount of Rs. 5000 was provided by NABARD in the FY 2013-14. As of 31^st March 2018, the amount disbursed is Rs. 4778 cr.

8) Food Processing Fund

Under this fund, the Government of India has done a loan commitment of Rs. 541 cr for 11 mega food park projects, 3 food processing units, and 1 integrated food park project on 31 March 2018.

9) Direct Lending to Cooperative Banks

NABARD has provided assistance to 58 Co-operative Commercial Banks (CCBs) and 4 State Cooperative Banks (StCBs) spread across 14 states with sanctioned amount of Rs 4,849 crore.

10) Credit Facility to Marketing Federations (CFF)

This federation promotes the marketing of farm activities and agricultural produce; also it promotes and strengthens marketing federations and cooperatives. Amount disbursed, as of Mar 2018 was Rs. 25436 crore.

11) Credit to Producer Organizations & Primary Agriculture Credit Societies (PACS)

NABARD launched Producer Organizations Development Fund (PODF) to support and finance Producer Organizations (POs) and Primary Agriculture Credit Societies (PACS). These organizations are formed to operate as Multi-Service Centres.

Also Know: How To Get Goat Farming Loan & Subsidy Scheme

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NABARD also provides schemes related to the development of Farming Sector, such as Dairy Entrepreneurship Development Scheme

Under this scheme, entrepreneurs related to the dairy market were provided assistance in setting up small dairy farms and other related components in the dairy sector.

Objectives of NABARD:

• Setting up of modern-day farms for the production of farm milk
• Upgrading the technology to handle milk production on a commercial scale
• Generating self-employment and improve infrastructure for the unorganized sector
• Encouraging heifer calf rearing and conserving good breeding stock

Also Read: Dairy Farm Business Loan: Interest Rate, Eligibility, Documents

Additional Schemes under NABARD

• Capital Investment Subsidy Scheme for Commercial Production Units for organic/biological Inputs
• NABARD loan for poultry farm under Poultry Venture Capital Fund (PVCF)
• Agri-clinic and Agribusiness Centres Scheme
• NABARD Agriculture Loan under National Livestock Mission
• GSS – Ensuring End Use of Subsidy Released
• Interest Subvention Scheme
• New Agricultural Marketing Infrastructure
• Credit Linked Capital Subsidy Scheme (CLCSS) under NABARD

NABARD also provides an important off-farm scheme that is mentioned below:

Launched by the Government of India in 2000, Credit Linked Capital Subsidy Scheme (CLCSS) was introduced for technology up-gradation of Micro, Small and Medium Enterprises (MSMEs) to facilitate technology upgradation of Small Scale Industries (SSIs) units in the defined products or sub-sectors. All the necessary information can be gained by visiting NABARD’s official website by clicking here.

Note: Under ‘Atmanirbhar Bharat Abhiyan’ or ‘Self-reliant India Scheme’, NABARD will extend additional emergency working capital or refinance support of Rs. 30,000 crore for Indian farmers. This funding will be over and above the Rs 90,000 crore to be provided by NABARD through the normal refinance route this financial year. Some of the key takeaways are mentioned below:

Rural Co-operative Banks and Regional Rural Banks shall be the main source for credit
To benefit approximately 3 crore farmers across India
To meet post-harvest (Rabi) and current Kharif requirements in May/June

Other business segments and entities that can avail benefit include farmers, fish farming, cattle farming, farmers, cold storage, etc. Loans under the NABARD scheme also helps in the setting up of rice mills, rural godowns and godowns for general purposes.

Hence, NABARD has contributed immensely the agriculture and rural development through financial and non-financial support to increase prosperity and growth of agriculture and rural sectors.

FAQs on NABARD Scheme

Q. What is the procedure for obtaining a NABARD loan for dairy farming?

Ans. There is no loan offered under the NABARD scheme. There is only concessional financing and subsidy provided by some regional rural banks, cooperative banks, and private and public sector banks.

Q. Who can apply for a NABARD loan?

Ans. There is no direct NABARD loan offered however to avail subsidy under the NABARD scheme you need to apply for a business loan with any commercial or co-operative bank.

Q. What are NABARD subsidies on dairy farming?

Ans. The subsidy offered under the NABARD scheme is 25% of the outlay (33.33 % for SC/ST farmers) as a subsidy subject to a maximum of Rs 1.20 lakh for a unit of 20 calves (Rs. 1.60 lakh for SC/ST farmers). For a 5 calf unit, the maximum permitted capital subsidy is Rs 30,000 (Rs 40,000 for SC/ST farmers) for a 5 calf unit.

Q. What is NABARD refinance?

Ans. NABARD finance is funding support offered to regional rural banks and co-operative banks in which the borrowed amount has to be repaid within 12 months. The NABARD refinance is offered for production, marketing, and procurement activities.

Q. What are all banks and NBFCs that come under NABARD?

Ans. The following banking entities are entitled to provide loans or subsidies under the NABARD scheme:

• Regional Rural Banks (RRBs)
• Co-operative Banks
• Private and Public Sector Banks

Q. How can I get a loan from NABARD for a poultry farm?

Ans. There is no loan provided by NABARD for poultry farm business. There are specific poultry farm loans provided by banks as per the applicant’s business requirements.

Q. Does NABARD give direct loans?

Ans. No, NABARD does not offer direct loans. Direct loans are provided by financial institutions like banks, NBFCs, Small Finance Banks, Micro Finance Institutions, etc.

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