Through interest subvention and financial support, the agri infra fund will provide a financing facility for investment in projects related to post-harvest management infrastructure and community farming assets.
The Union Cabinet today approved to form ‘Agriculture Infrastructure Fund’, which is aimed at injecting formal credit to farm and farm processing-based activities while creating several job opportunities in rural areas. Through interest subvention and financial support, the scheme will provide a financing facility for investment in projects related to post-harvest management infrastructure and community farming assets. Agriculture Minister Narendra Singh Tomar said that the agri infra fund will provide loans to Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group (SHG), and farmers.
The facility of loans will also be extended to the Joint Liability Groups (JLG), Multipurpose Cooperative Societies, agri-entrepreneurs, startups, Aggregation Infrastructure Providers, Public-Private Partnership project sponsored by the government agency or local body. The loans under the new scheme will be disbursed in the span of four years starting with a sanction of Rs 10,000 crore in the current year and Rs 30,000 crore each in the next three financial years.
Watch | News with Financial Express July 8, 2020
The government notified that all loans under this financing facility will have an interest subvention of 3 per cent annually up to a limit of Rs 2 crore. While the interest subvention will be available for a maximum period of seven years, credit guarantee coverage will be available for eligible borrowers under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs 2 crore.
The agri infra fund will be managed and monitored through an online Management Information System (MIS), which will provide a platform to the qualified entities to apply for a loan under the fund. The online platform will also provide benefits such as transparency of interest rates offered by multiple banks, scheme details including interest subvention and credit guarantee offered, minimum documentation, and faster approval process. Meanwhile, the government assured that the national, state, and district level monitoring committees will be set up to ensure real-time monitoring and effective feedback. The scheme is designed for a span of ten years from FY 20 to FY 29.