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A loan is an agreement in which a lender makes funds available to another party in return for an interest charge and the repayment of the money at the conclusion of the borrowing agreement. Loans offer liquidity to firms and individuals and are thus an essential type of financial institution.
The borrower’s interest rate, which may be variable or fixed, the loan’s maturity date, the quantity and dates of payments to be made to the lender, and the amount of any collateral to be placed against the note.
What do you mean by NABARD?
National Bank for Agriculture and Rural Development (NABARD) is an apex Development Bank authorised to provide and regulate credit as well as other amenities for the development and empowerment of agricultural production, micro enterprises, cottage and countryside industries, arts and crafts and certain other rural crafts, and other affiliated commercial sectors in rural areas in order to encourage integrated and sustainable development and prosperity, as well as matters related there.
NABARD has been assigned several tasks in agriculture and financial development, including policy formation, planning, and operations. NABARD carries out these obligations effectively and strives to promote and develop rural industries like agriculture, village industries, other small-scale businesses, and rural crafts in order to improve infrastructure and job possibilities for the people who live in these areas.
The Government of India established this bank in compliance with the National Bank for Agriculture and Development Act of 1981. Simply expressed, the National Bank for Agricultural and Rural Development, or NABARD, is the country’s principal and specific agricultural and rural development bank.
NABARD loans under NABARD scheme
Here is the list of NABARD loans
Short Term Loans – Refinance
Farmers can obtain short-term loans or crop loans from a variety of financial institutions. By making this loan available, one may help to ensure the food security of the country. During the fiscal year 2017-18, NABARD loans approved a short-term credit of Rs. 55,000 crore to a number of financial institutions for seasonal agricultural activity.
Long-Term Credit
NABARD long term loans accessible to banks for a variety of agricultural and non-farm enterprises. The long-term loan is for a period of 18 months to a maximum of 5 years. NABARD remortgaged about Rs. 65,240 crores for financial institutions in fiscal year 2017-18, including a concessional refinancing of Rs. 15,000 crore to Cooperative banks and Regional Rural Banks (RRBs).
Fund for Long-Term Irrigation (LTIF)
With an initial investment of Rs. 20,000 crore, this fund was founded primarily to provide funds for 99 irrigation projects. Following the funding of 99 projects, two more were added: the ‘North Koel Reservoir Project’ from Bihar and Jharkhand, and the ‘Polavaram National Project’ from Andhra Pradesh.
Pradhan Mantri Awas Yojana -Gramin (PMAY-G)
The National Rural Infrastructure Development Agency (NRIDA) received Rs. 9000 crore under this yojana to develop pucca dwellings with all necessary facilities for impoverished people by 2022.
Infrastructure Development Assistance from NABARD (NIDA)
The NABARD Infrastructure Development Assistance (NIDA) programme was established to give finance to financially sound state-owned institutions and enterprises.
Warehouse Infrastructure Investment Fund
The Warehouse Building Fund provides agricultural goods as well as scientific storage facilities. In fiscal year 2013-14, NABARD issued an initial loan of Rs. 5000. As of March 31, 2018, the total amount disbursed was Rs. 4778 crores.
Fund for Rural Infrastructure Development (RIDF)
The RBI established the Rural Infrastructure Development Support in response to a funding deficit in the subsector in order to fund agricultural infrastructure projects. The primary focus of this fund is rural infrastructure development in India, and the amount allocated under this fund in FY 2017-18 was Rs. 24,993 cr.
NABARD loan on dairy farming
In India, dairy farming is mostly disorganised. In 2005, the government introduced the “Venture Capital Scheme for Dairy and Poultry.” As of March 31, 2010, roughly 15,268 dairy farms have interest-free loans totaling Rs.146.91 crores. We investigate ways to obtain NABARD subsidies for dairy farming.
In India, dairy farming is a significant business, and milk output is increasing year after year. The NABARD loan for dairy farming was created in an effort to significantly boost dairy production in India.
The scheme’s aims are to support the establishment of modern dairy farms for the production of clean milk and the conservation of excellent breeding stock, as well as to encourage heifer calf raising and the conservation of good breeding stock. To improve the quality and conventional technologies used to handle milk on a commercial basis. To create self-employment and infrastructure, mostly for the unorganised sector.
Agriculture loan subsidy of NABARD
Through asset creation, investment credit results from capital creation. It promotes technical advancement, which leads to improved production, increased productivity, and additional cash for farmers and enterprises. NABARD offers Long Term and Medium-Term Refinance to banks in order for them to give appropriate agriculture loan subsidies to farmers, rural craftsmen, and others for their investment operations.
Conclusion
NABARD is tasked with funding credit institutions in rural regions, supporting institutional growth, and evaluating and inspecting customer banks in order to fulfil its function as a facilitator of rural prosperity. NABARD, the main Development Bank mandated by the Government of India to facilitate loan flow for upgrading and boosting agriculture and other local industries, granted agricultural flow of credit of Rs 1,57,480 crore in 2005-2006.
