Objectives of NABARD scheme
The NABARD scheme is designed to support the growth of rural areas by focusing on agricultural and small-scale industries. Its aim is to provide financial assistance and foster sustainable development in underserved communities by enhancing infrastructure, boosting agricultural productivity, and supporting rural livelihoods. NABARD aims to strengthen rural economies and reduce poverty in India. Here are its key objectives:
- Financial support for farmers and entrepreneurs: Provides credit to farmers, rural artisans, and small businesses.
- Sustainable development: Promotes long-term development in rural areas through infrastructure and agricultural support.
- Improved agricultural productivity: Enhances farming practices and encourages modern techniques to increase yields.
- Job creation and income growth: Aims to reduce unemployment and raise incomes in rural areas.
- Promotion of modern farming: Encourages the adoption of new technology and farming practices.
History of NABARD
The functions now performed by NABARD were earlier managed by the Agriculture Refinance and Development Corporation (ARDC) of the Reserve Bank of India. NABARD was set up as a statutory body under the National Bank for Agriculture and Rural Development Act, 1982, and came into existence on July 12, 1982, following the recommendations of the B. Sivaraman Committee. It serves as the apex institution in India for meeting credit needs and regulating the agriculture sector, rural small-scale and cottage industries, and other rural enterprises. NABARD is headquartered in Mumbai, and its current Chairman is Dr. G.R. Chintala.
Features of NABARD scheme
The NABARD scheme offers multiple features to drive rural and agricultural development in India. It provides accessible loans, affordable interest rates, and training opportunities to rural communities. Additionally, the scheme focuses on rural infrastructure projects like irrigation and roads, which are essential for improving agricultural productivity and enhancing rural livelihoods. Here are some of its key features:
- Financial assistance for diverse projects: Supports both agricultural and non-agricultural ventures in rural areas.
- Lower interest rates for farmers: Offers competitive loan rates to farmers, entrepreneurs, and rural workers.
- Focus on rural infrastructure: Invests in essential infrastructure like irrigation, roads, and market access.
- Training and capacity-building: Provides skill development and training programmes for rural artisans and workers.
- Support for modern farming: Promotes the use of advanced farming technology and practices.
Functions of NABARD
NABARD plays a crucial role in driving rural development by implementing several functions aimed at supporting agriculture, rural entrepreneurship, and infrastructure. It provides long-term financing for agricultural projects, supports rural credit institutions, and helps promote rural infrastructure. Additionally, NABARD focuses on policy advocacy, research, and capacity-building to ensure sustainable growth in rural India. Here are its key functions:
- Long-term financing for agricultural projects: Provides funds for irrigation, farm mechanisation, and agro-processing.
- Refinancing for rural credit institutions: Enhances credit flow to rural sectors by offering refinancing facilities.
- Rural infrastructure development: Supports infrastructure projects like roads, water supply, and sanitation.
- Research and policy support: Promotes research and develops policies for fostering rural growth.
- Training and technical support: Provides skill development and technical assistance to farmers and rural entrepreneurs.
NABARD scheme – Interest rates
Interest rates under the NABARD scheme vary based on the type of loan and the project’s requirements. However, the primary advantage of these loans is that they are offered at lower-than-market interest rates, making them more affordable for farmers, rural entrepreneurs, and small businesses. The interest rates typically range from 7% to 12%, depending on the loan type. NABARD aims to provide financial support at competitive rates to encourage investment in rural and agricultural development. Additionally, the terms and conditions associated with these loans are often more flexible than traditional financing, enabling individuals and businesses in rural areas to access the funding they need for long-term growth and sustainability. For more information on interest rates, you can check the pradhan mantri mudra loan interest rate.
| Loan Type |
Interest Rate |
| Agricultural loans |
7% to 10% |
| Rural infrastructure loans |
8% to 12% |
| Small-scale industry loans |
10% to 14% |
Importance of NABARD Scheme
The creation of NABARD has played a vital role in strengthening rural finance in India. Through its developmental and supervisory functions, it has introduced modern banking practices and supported rural economic growth.
Key contributions of NABARD include:
- District-level credit programmes: Designing and encouraging the implementation of credit initiatives through rural banks.
- Microfinance through SHG linkages: Pioneering self-help group (SHG) financing, now recognised as one of the most successful microfinance models globally.
- Kisan Credit Card scheme: Enabling farmers across India to access timely and affordable credit.
- Support for artisans: Offering training and assistance to promote indigenous handicrafts and empower rural artisans.
- Refinancing facilities: Providing both short-term and long-term refinancing options to strengthen the rural sector.
- Infrastructure development: Funding projects to enhance rural infrastructure and connectivity.
- Supervision of rural banks: Overseeing the functioning of Regional Rural Banks (RRBs) and Co-operative Banks to ensure efficiency and stability.
Different types of loans under NABARD scheme
The NABARD scheme offers various loan options to support rural development and agricultural projects. These loans cater to farmers, rural entrepreneurs, and infrastructure development. They are designed to meet specific needs such as crop cultivation, setting up small businesses, and building essential infrastructure. NABARD’s loan offerings ensure the financial upliftment of rural communities. Here are a few key types of loans:
- Agriculture loans: For crop cultivation, irrigation, and agricultural equipment.
- Rural infrastructure loans: For developing roads, water supply systems, and sanitation facilities.
- Small-scale industry loans: For entrepreneurs to set up or expand rural businesses.
- Training loans: For skill development programs to empower rural workers and artisans.
These loans are instrumental in fostering agricultural growth, boosting rural enterprises, and improving infrastructure, thereby contributing to overall rural development. In addition, if you are considering launching a small business, you can apply for a shishu mudra loan as well.
NABARD schemes for farming sector and dairy sector
NABARD has dedicated schemes to promote growth in the farming and dairy sectors, providing essential financial support. For farmers, it offers loans for crop cultivation, irrigation, and farm mechanisation, along with the adoption of modern farming techniques. The dairy sector also benefits from NABARD’s support through loans for dairy farm development, cattle purchase, and milk processing. Additionally, NABARD provides training programs aimed at enhancing skills in farming and dairy management, thereby improving productivity and incomes in these sectors. These targeted initiatives help farmers and entrepreneurs thrive, contributing to rural economic growth.
Key schemes:
- Farming sector: Loans for crops, irrigation, mechanisation, and modern farming techniques.
- Dairy sector: Loans for dairy farm development, cattle purchase, and milk processing.
- Training: Skill development programs for farmers and dairy entrepreneurs.
NABARD’s schemes support both the farming and dairy sectors, improving livelihoods and fostering sustainable rural development. For more financial assistance, you might also want to check out the pmfme scheme.
*For the latest updates on NABARD scheme, it is advisable to check NABARD’s official website.
Eligibility criteria for NABARD Schemes
NABARD does not lend directly to farmers or artisans. Instead, financial support is extended through State Cooperative Banks (SCBs), Regional Rural Banks (RRBs), and other approved financial institutions.
Each NABARD scheme has its own eligibility criteria, and in many cases, subsidies are also available under different loan programmes.
Eligibility criteria for Dairy Subsidy Scheme
- Farmers, entrepreneurs, members of SHGs, and individuals from both the organised and unorganised sectors can apply.
- Applicants must be members of a milk producer company or cooperative society registered with NABARD.
- Ownership of at least 10 cows is mandatory.
- The dairy should have a minimum production capacity of 200 litres per day.
- Proper milking equipment must be installed at the dairy.
- Completion of training at an approved training centre is required.
Eligibility criteria for Dairy Farming Scheme
- The applicant must be an Indian citizen.
- Small or marginal farmers with an annual family income below Rs. 1,00,000 are eligible.
- The applicant should own or lease at least two hectares of land.
- Apart from farmers, entities such as companies, cooperatives, state governments, farmer-producer organisations, and entrepreneurs may also qualify, though their criteria can differ.
Documents required for NABARD scheme
The required documents may differ depending on the specific NABARD scheme or subsidy you are applying for. For the Dairy Farming Scheme, some of the common documents include:
- Sale deed or lease agreement for the land you own or lease.
- Income certificate confirming that your family’s annual income is not more than Rs. 1,00,000.
- Identity and address proof documents such as Aadhaar card, PAN card, etc.
The official NABARD website provides detailed lists and scheme-specific PDF documents for clarity on required paperwork.
Steps to avail of NABARD Scheme benefits
In most cases, NABARD does not directly disburse loans. Instead, it provides funds to banks, credit unions, NBFCs, and other financial institutions, which then pass on subsidies to farmers, cooperatives, entrepreneurs, and SHG members.
Here’s how you can apply:
- Step 1: Visit the official NABARD website and download the application form.
- Step 2: Print the form, fill in all necessary details carefully, and attach the required documents.
- Step 3: Submit the completed form at the nearest NABARD office. You can also send it by courier or post.
- Step 4: Details of district and nodal offices are available on the NABARD website.
Registration process for loan subsidy benefits
- Visit the official NABARD registration portal.
- Enter details such as your name, email ID, and PIN code, then click ‘Submit.’
- You will receive an email with your user ID, password, and a link to log in to the portal.
Conclusion
The NABARD scheme is a vital resource for promoting rural development and enhancing the agricultural sector in India. With its wide range of financial products and services, the scheme helps farmers, small businesses, and entrepreneurs access affordable credit to improve productivity and create sustainable growth. Whether you are in farming, dairy, or a small-scale industry, NABARD’s support can help you realise your growth potential. The scheme also facilitates infrastructure development, skill-building, and the adoption of modern technologies to drive economic advancement in rural areas. For more financial assistance, consider exploring a business loan to complement your NABARD scheme funding.
With Bajaj Finserv Business Loan, you can get a loan of up to Rs. 80 lakh with competitive interest rate, convenient repayment tenure and quick loan disbursal. For more information about business loan options, also consider understanding the cgtmse fee for a clearer picture of how business loans are supported by guarantees.
