Which bank is best for agriculture loan

India is an agricultural-based economy country. India is dependent on agriculture for most of its economic finance. Farming is the process of converting raw materials such as seeds, plants to plant products that can be consumed by humans. There are a lot of techniques, technologies, and procedures involved in farming. Many farmers require agricultural loans to fulfill their needs of cultivation of crops and other forms such as horticulture, silk farming, animal husbandry, pisciculture, apiculture, and aquaculture.

Agricultural Loans in India

There are various requirements of agricultural loans, they are,

  • Managing day to day operations
  • Purchase of farming machinery such as tractors, harvesters, etc
  • Purchase of land for cultivation and farming
  • Loan for storage areas
  • Loans for the marketing of products
  • Other agricultural activities such as labor salary etc
  • For the transportation of goods from farms to markets etc

Apart from the above requirements, there are requirements for financial aids such as grants and subsidies and protection of farmers in the event of crop damages due to various climatic and environmental conditions.

The agricultural loans are required for the smooth flow of farming activities by the farmers in India.

Eligibility Criteria for agricultural loans in India

All types of farming activities those farmers do include the small and very low profile farmers such as oral lessees, sharecroppers, and tenant farmers are eligible for agricultural loans in India.

Documents required for the agricultural loans

  • Kissan Credit card
  • Photo identity proof
  • A valid address proof
  • Proof of land ownership, a record of rights and revenue receipts, etc

Prevailing interest rates for various agricultural loans

Crop Loans –

The interest rate for the crops loans as per the Government of India guidelines if for more than 3 lac is 7%. However, if the farmer can repay the loans on time, they will get the subvention of 3% so that the interest rate is just 4%.

Post Harvest Loans –

For this, the interest rate for the farmers is 7% with subvention. Commercial interest rates are applicable if the farmer avail post-harvest loans against the negotiable warehouse receipt.

Land Purchase –

For land purchase, the interest rate varies if the land is within 5 km from farmers’ residence. For loans greater than 50000 the margin is 10%, however, for loans up to 50000, there is no margin rate.

Types of agricultural loans in India

In India, various nationalized banks and private banks provide agricultural loans to farmers with high transparency in loan processing, repayment, and disbursal, etc. This is to ensure that the agricultural loans are availed by farmers with requirements and farmers are not getting cheated.

State Bank of India Loans –

SBI offers various agricultural loans for the farmers such as for fish farming, dairy and poultry, and various crops cultivation. They have various products for farmers such as multi-purpose gold loans, Kissan Credit card, and gold crop loans, etc

Private Banks –

Various banks such as AXIS, HDFC, and ICICI, etc offer loans to the farmers. They also provide long term and short term loans.

National Bank for Agriculture and Rural Development (NABARD) –

This institution is providing the necessary loans to the farmers since 1980. For the credit in the field of agriculture, all the Indian banks come under the authority of this institution. This is one of the recognized institutions by the government of India. One of the most popular contributions of this institution is the Kissan Credit Card (KCC).

Loans by Nationalized Banks –

Various nationalized banks help farmers to avail easy loans for very low-interest rates. They offer various types of agriculture loans such as debt swapping, rural godown, and warehouse receipt financing, etc. The banks are Punjab National bank, United Bank, Dena Bank, and Union Bank of India, etc

Kissan Credit Card –

This scheme was designed for the farmers to protect them from money lenders who charge exorbitant charges. This card is linked to farmers’ savings account and can be used by farmers to avail easy finance for various activities such as farm maintenance, cultivation, purchase of tractors, and many more activities.

List of banks that provide agriculture loans

 

List of Banks

Conclusion and Benefits of Agriculture Loans

In this article, we have discussed various types of agriculture loans that can have various benefits to the farmers. The benefits are as follows,

  • Attractive Interest rates
  • Minimum documentation
  • Flexible repayment tenure
  • Various purposes both short term and long term
  • Some lenders also provide unsecured loans.