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NABARD Scheme

Nabard Loan

Last Updated 17th Jan 2021

  • National Bank for Agriculture and Rural Development or NABARD functions with the aim of nation-wide agriculture and rural development.
  • It generates funds for agriculture and related activities.
  • NABARD offers loans for farming as well as non-farming sectors.
  • Rural development activities fall under the beneficiary list of NABARD.
  • NABARD allows both direct lending and refinancing services.
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About Nabard Scheme

Agricultural and rural development have always been matters of great concern for the Indian government. Time and again, many government schemes have been introduced with the purpose of developing the rural and agriculture standards. One such scheme is the National Bank for Agriculture and Rural Development scheme or the NABARD scheme The welfare scheme generates financial support for agriculture sectors and rural development.

The NABARD scheme is offered and operated under the institute of National Bank for Agriculture and Rural Development. This institute is responsible for all planning and operations related to agriculture and rural development of the country. Setting up funds for the operations falls on NABARD as well. The institution and its scheme encourage sustainable agriculture along with rural development via promoting technical revolution, industrial development and financial or non-financial resourcing.

For the seamless implementation of the NABARD scheme, its areas of functionality have been divided into the following three departments.

  • Finance
  • Development
  • Supervisory

Features of Nabard Scheme

The NABARD scheme is featured with the following traits.

  • Funding or refinancing development operations.
  • Constructing and improving the infrastructure in the rural segments.
  • Drafting a district-level credit strategy for the respective sections.
  • Assisting and guiding the banks and non-banking financial companies in meeting their yearly credit targets.
  • Administrating the RRBs or the Regional Rural Banks along with the Cooperative Banks.
  • Introducing and strategizing rural development projects.
  • Executing rural development schemes offered by the government.
  • Providing training programs for handicraft artisans.

NABARD Scheme Interest Rate

NABARD loan scheme refinances the banks as well as the non-banking financial companies. Various schemes under NABARD come with different rates of interest. The interest rates are set by the NABARD itself and are changeable as per the decision of NABARD and the instructions of RBI. Note that GST and other service taxes may be imposed over the standard charges regardless of your preference for NABARD loan applied online or offline.

Below listed are the rate of interest for refinancing under the NABARD loan scheme.

Financial assistance Rate of interest
Long Term Refinance 8.50% onwards
State Cooperative Banks 8.35% onwards
Regional Rural Banks 8.35% onwards
State Cooperative Agriculture and Rural Development Banks 8.35% onwards
Short Term Refinance 4.50% onwards

Nabard Scheme Loans

From crop production to agriculture, land purchase loan NABARD provides assistance for all. The rural development initiatives are broad-ranged as well. To be more precise, the National Banks for Agriculture and Rural Development has the following loans in their lists of financial assistance.

Short term loans (refinance)

The NABARD short-term loans are mainly for financing crop production and thus increasing the food security of the nation. Farmers can avail assistance for their crop production under this scheme from selected financial organizations. NABARD has granted ₹ 55,000 Cr for the 2017-18 financial year to be used in funding the short-term loan applicants.

Long term loans

The long term loans are sanctioned for farming and non-farming operations. The tenure for the long term loans ranges from 10 months to 5 years. As of the 2017-18 financial year, NABARD has disbursed financial assistance of ₹ 64,240 Cr for the financial organizations, including ₹ 15,000 Cr as concessional refinancing for the Cooperative Banks and the Regional Rural Banks. The agriculture land purchase loan NABARD offer comes under the long term loans.

Rural Infrastructure Development Fund or RIDF

As pointed out by the name, this NABARD loan scheme caters to the rural infrastructure development projects. RBI introduced the RIDF to adjust any deficit in the funds for the priority sectors. RIDF received a total of ₹ 24,993 Cr for the 2017-18 FY under the NABARD scheme.

LTIF or Long Term Irrigation Fund

The long term irrigation fund started operating with the financial support of ₹ 20,000 Cr, keeping 99 irrigation projects as the target recipient. Later on, the North Koel Reservoir Project from the states of Jharkhand and Bihar along with the Polavaram National Project from the state of Andhra Pradesh were added to the target recipient under LTIF.

PMAY-G or Pradhan Mantri Awas Yojana - Gramin

The Pradhan Mantri Awas Yojana - Gramin is a rural development scheme that aims to provide Pucca houses to all living in Kucha houses by 2022. NABARD generated ₹ 9,000 Cr to the National Rural Infrastructure Development Agency or the NRIDA for the purpose.

NABARD Infrastructure Development Assistance or NIDA

State-owned institutions or corporations that are financially well off can obtain financial support under this sub-program of NABARD. The finance gained is to be used in the development of infrastructure.

Warehouse Infrastructure Fund

This NABARD fund financially equips the primary agriculture products with scientific warehousing infrastructure. The financial year of 2013-14 generated a loan amount of ₹ 5,000 The total loan amount disbursed under the fund by March 2018 is ₹ 47,778 Cr

Food Processing Fund

The Food Processing Fund is stated to serve one integrated and 11 large food park projects along with three food processing units of rural India. An amount of ₹ 541 Cr have been sanctioned for this fund.

Direct Lending

Four government-owned cooperative banks, coupled with 58 cooperative commercial banks, have been selected for direct lending. A fund of ₹ 4,849 Cr have been allocated for this scheme.

Credit Facility to Marketing Federations or CFF

The CFF financially builds up the marketing cooperatives and federations to encourage and improve the marketing strategies of the farm and agriculture-related activities and products. The fund has received the assistance of ₹ 25,436 Cr for reaching the goals.

Primary Agriculture Credit Society or PAC

For providing financial backing to primary credit societies and producer organizations serving the agriculture field, NABARD introduced the PODF or the Producer Organizations Development Fund. The organization acts as the multi-service under the scheme.

Note that the loans are available at selective financial institutions. Most lenders allow both Nabard loans to apply online and offline.

NABARD Scheme for Farming Sector

Farming sectors are not excluded from the benefits of the NABARD scheme. Here are the schemes introduced for developing the farming sector of the country.

Dairy Entrepreneurship Development Scheme

The dairy sectors and its related components are eligible for assistance under this development scheme. The NABARD dairy loan is provided with the following objectives.

  • The loan can be availed to set up small yet modern-day farms for increasing farm milk production.
  • The scheme is aiming for updating the technology involved in the production and handling of farm milk.
  • The loan encourages the commercialization of the farming sector.
  • It helps in creating scope for self-employment.
  • The scheme is working for developing the infrastructure of the unorganized fields.
  • NABARD dairy loan motivates heifer calf raising and good breeding.

Functions of NABARD

NABARD plays a crucial role in both agricultural and rural improvement. Its area of functions is wide and commendable.

  • Planning and executing fundings for development activities related to agriculture and farming.
  • Financially supporting the development activities in the rural parts of India.
  • Introducing policies for the financial organizations of rural areas.
  • Providing direct and indirect refinance services to corporate banks and their customers.
  • Extending financial assistance for the food parks together with the food processing units of the respective food parks.
  • Building funds for the marketing federations, rural infrastructure improvement and warehouse infrastructure improvement.

FAQs

How can I get a loan from Nabard?

To avail a loan from NABARD, you need to decide which loan you require, and you must meet the eligibility criteria of the respective loan facility. Visit the official website and download the application form of your preferred loan provider or visit any of the branches.

What is a Nabard loan?

NABARD loan is a form of financial assistance provided by the NABARD institution to the agricultural and rural sectors. The loan is generated for the improvement and development of the stated sectors.

How can I get a dairy loan from Nabard?

You can get a dairy loan from NABARD both online and offline. For the online process, you have to land on the official website of the lender and for the offline process, go to the office of the lender. Fill up the application form and submit all required documents to make the application.

How can I get a Nabard loan for poultry?

The first step for availing a NABARD poultry loan is to select a lender. Once that has been done, visit either the office or the online portal of the lender. Make the application and complete the documentation.


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