Agricultural Loan Schemes – Types, Eligibility, Benefits and Application Process

• Kisan Credit Card (KCC) provides credit for crop cultivation, post-harvest expenses and eligible allied activities
• Interest support is available under government schemes for eligible agricultural loans, subject to applicable conditions
• Farm equipment loans can help finance eligible machinery and agricultural assets
• Allied activity loans support activities such as dairy, fisheries and poultry
• Agriculture Infrastructure Fund supports eligible investments in post-harvest and community farming infrastructure
• Eligibility and loan terms vary based on the scheme, purpose of borrowing and lender

Agricultural loan schemes are financing facilities designed to meet the credit requirements of farmers, agricultural workers, agri-entrepreneurs and other eligible participants in the agriculture sector. The financing may be used for crop production, purchasing agricultural inputs, farm equipment, irrigation, livestock, fisheries, post-harvest activities or developing agricultural infrastructure. The purpose, loan amount, interest rate, repayment period and security requirements depend on the specific scheme and lender.

Several government-supported credit programmes address different agricultural financing needs. The main ones include:

Eligibility varies according to the scheme and lender. Depending on the facility, applicants may include:

• Individual farmers and owner cultivators
• Tenant farmers
• Sharecroppers
• Oral lessees
• Self Help Groups and Joint Liability Groups
• Farmers involved in allied activities
• Agricultural entrepreneurs
• Cooperatives and eligible farmer organisations
• Entities developing eligible agricultural infrastructure

The permitted use depends on the loan scheme. Common agricultural financing requirements include:

1. Crop cultivation

Loans can help meet expenses related to seeds, fertilisers, pesticides, labour and other cultivation requirements.

2. Farm equipment

Farmers may require financing for eligible agricultural machinery, equipment and other farm assets.

3. Irrigation and land development

Credit may be used for eligible irrigation facilities, land development and related agricultural investments.

4. Allied activities

Agricultural credit can support activities such as dairy, fisheries, poultry, beekeeping, mushroom cultivation and sericulture, subject to scheme conditions.

5. Post-harvest requirements

Financing can support activities such as storage, processing, marketing and other eligible post-harvest requirements.

Agricultural loan schemes can provide structured access to institutional credit for farming and related activities.

Key benefits include:

• Access to working capital for seasonal farming requirements
• Financing for agricultural equipment and assets
• Credit support for allied activities
• Interest support under applicable government schemes
• Credit guarantee support under eligible programmes
• Financing for post-harvest infrastructure
• Flexible credit options based on the purpose of borrowing

The documentation depends on the type of loan and lender. Applicants may generally be asked to provide:

• Identity and address proof
• PAN or other applicable identification
• Land ownership or cultivation-related documents, where applicable
• Details of crops and cultivated area
• Bank account details
• Proof of agricultural activity
• Income or repayment-related documents, where applicable
• Documents relating to the proposed asset or project for investment loans

Tenant farmers, sharecroppers and other applicants without conventional land ownership documents may need to provide alternative proof accepted under the applicable scheme and lender requirements.

The application process depends on the selected scheme and lending institution. 

Here is the process:

1. Identify the requirement – Determine whether the funds are needed for crop cultivation, equipment, allied activities or infrastructure
2. Check eligibility – Review the scheme and lender-specific eligibility criteria
3. Prepare documents – Keep identity, agricultural activity and financial documents ready
4. Submit the application – Apply through the participating bank or applicable digital platform
5. Complete verification – The lender verifies the applicant, purpose and supporting documents
6. Receive the decision – The lender communicates the sanctioned amount and applicable terms
7. Use the funds – Use the loan for the approved agricultural purpose and follow the repayment schedule

Before choosing an agricultural loan scheme, consider:

• Purpose of the loan
• Eligible loan amount
• Interest rate and applicable subsidy
• Repayment schedule
• Processing and other charges
• Collateral or guarantee requirements
• Eligible expenses
• Insurance requirements, if applicable
• Consequences of delayed repayment

Agricultural loan schemes provide access to credit for farmers and other eligible participants to meet different farming and agriculture-related financial requirements. Depending on the scheme, borrowers can use the funds for crop cultivation, agricultural inputs, farm equipment, allied activities, post-harvest expenses and infrastructure development. The Kisan Credit Card can support short-term credit requirements for cultivation and eligible allied activities, while schemes such as the Agriculture Infrastructure Fund focus on financing eligible agricultural infrastructure. Interest support and credit guarantee benefits may also be available under specific government schemes, subject to applicable conditions.