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Before applying for agricultural loan…

Before applying for agricultural loan…
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Indian Government is having vision to Double income of farmers in next five years. For this Vision government is planning to design various schemes, but farmers should also take initiative to fulfil this goal.

Some Major factors which plays major role to raise income of farmer those were:

  1. Having adequate technical knowledge regarding agriculture.
  2. Good quality Agri Inputs
  3. Optimum Market Price and Market for Agri Produce
  4. Capital Arrangement.

Capital plays significant role to raise income. If we want to increase production we require additional finance; Additional capital also helps farmers to utilise various government schemes.

It is Mandatory to provide 40% finance to Priority sectors by private as well as nationalised banks which includes Agriculture, Education, MSM Enterprises, Home loan and  Export sector, Within that 18% of loan should provide for Agriculture sector only.

Majority farmers are not interested to take a credit, some farmers are frustrated by seeing a list of documents require for loan proposal and hesitate by tedious bank loan process and at last they drop to go for credit. To overcome this problem we should learn thoroughly regarding Bank credit.

In simple way Agricultural loan is divided on the basis of Usability of Credit in Agriculture.

  1. KCC or Crop Loan : If Loan is require for daily needs i.e. for purchase of seeds, fertilizer and pesticides then it’s called as Crop Loan or Kisan Credit card. After loan application Bank will fix a Limited amount of Kisan credit card, which we can use throughout year. Farmer should repay loan after a year. For this loan farmer should hypothecate his growing crop as a security. Some banks also take declaration on land as a security.

Documents require for applying KCC are,

  1. 7/12, 8A Extracts and Mutation Entry for last 30 years of own land.
  2. Talathi’s Certificate for Crops which are cultivation in his land.
  3. Report Regarding Farming (Income statement for last three years with current year estimated income)
  4. Declaration from Other banks regarding not having any credit facility with him.
  5. Latest land valuation report and Certificate on do not having any declaration on land from any financial institute.

 

 

  1. Project or Term Loan in Agriculture: Credit is also granted for any Agri allied project i.e. for purchase of dairy animal, Purchase of tractor, for Fitting of Irrigation facility, digging of well etc…Bank can finance up to 75 to 90% of the total project cost. For these type of loan bank will mortgage his own land with hypothecation of machinery, Implements which will be purchase for a project.

Documents require for applying Project Loan,

  1. 7/12, 8A Extracts and Mutation Entry for last 30 years of own land.
  2. Talathi’s Certificate for Crops which are cultivation in his land.
  3. Report Regarding Farming (Income statement for last three years with current year estimated income)
  4. Declaration from Other banks regarding not having any credit facility with him.
  5. Latest land valuation report and Certificate on do not having any declaration on land from any financial institute.
  6. Complete project report with quotation of Machineries and other which require for project.

 

Please Note:

  • Loan should be applied from reputed Banks or cooperative societies only.
  • Please apply loan from single bank only.
  • During Agricultural loan process, it is mandatory to take consent from all co owners of land which are having names on 7/12
  • All documents should be current/updated which we are submitting for loan application.
  • Please verify your names on documents before submitting for loan application.
  • After sanctioning of loan firstly we read and understand all terms and conditions in sanction letter then signed it and do further process.
  • Firstly understand Interest on Loan and collect repayment scheduled from bank.
  • If Sanction amount is more should withdraw an amount which are actually required and should utilize that amount for productive purpose only.
  • Collect Loan Account statement in regular intervals from respective bank.
  • Repay your loan immediately after selling a produce and try to repay your loan in advance i.e. before repayment date.

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