
Agriculture loans are low-interest loans granted by dedicated government agencies as well as banks for the smooth functioning of agricultural activities in India. The interest rates for the best agriculture loans in India are considerably lower in comparison with other loans. By acquiring loans, farmers can go ahead with purchasing modern machinery, paying for the operating expenses, paying for the warehouse as well as storage expenses, buying new land, constructing sheds for grain storage, buying seeds, pesticides, fertilizers, etc.
Banks in India grant Agri loans that initiate at an interest of merely 7.50 % per annum.
Agriculture is widely regarded as the backbone of the Indian economy, and it unquestionably comes as no wonder to see financial institutions grant monetary aid to farmers all over India. Agricultural loans are available for diverse sorts of farming-related exercises.
In India, agricultural loans are not only extended to farmers working towards food crop cultivation, but they are available to any individual who is involved in other agriculture-related divisions like horticulture, silk farming, apiculture, aquaculture, animal husbandry, and floriculture.
Synopsis |
1. Top Agriculture Loans in India: Benefits, Documents, and Charges |
2. Types of Agriculture Loans in India |
3. Documents Needed to Apply for an Agricultural Loan |
4. Features of Agriculture Loans in India |
5. Leading Lenders and Interest Rates |
6. Agriculture Loans in India: Fees and Charges |
7. Eligibility Criteria for Agricultural Loan |
8. Significant Aspects to Keep in Mind while Applying for the Loan |
9. Benefits of Agricultural Loan |
10. Union Budget 2020-21: Agriculture-related Allocation |
11. Agriculture Loans in India: Agriculture Loan Providers |
12. Agriculture Loans in India offered by Nationalised Banks |
13. Summing Up |
Agriculture is one of the most substantial occupations in India. Farmers and farming business enthusiasts can apply for an agricultural loan for investment purpose & short tenure purposes, like production. Given below are the significant types of agriculture loans in India offered by numerous banks as well as other lenders.
Solar Pump Set Loan: It’s a type of agricultural loan on the basis of end-use that extends for the purchase of a photovoltaic pumping system with respect to its applicability in small irrigation projects. Solar Pump Set Loan [1] is known as a long term loan with a repayment tenure of not more than ten years.
Farm Mechanization Loan: This form of loan can be useful in buying new machinery, repairing and replacing old ones, purchasing harvesters or tractors, or other agricultural equipment. Some banks are ready to lend a general-purpose loan, while other banks have categorized these loans into diverse types on the basis of the end-use. For instance, the State Bank of India extends tractor loans; integrates harvester loans and loans with respect to purchasing irrigation equipment.
Loan for Allied Agricultural Activities: This type of loan is granted to farmers to meet the requirements associated with working capital and needs related to long-term investment for allied agricultural activities.
Agriculture Term Loan: Agriculture Term Loans are basically the long term loans of about 48 months granted by several lenders in order to meet expenses pertaining to agriculture that are usually not seasonal in nature. With the help of this loan amount, you will able to buy new machinery or enhance the quality of existing ones, install solar power, windmills, and more. Generally, banks allow repayment tenure of 3- 4 years for Agriculture Term Loan so that you can make the payment for the borrowed amount back either monthly or bi-annual or yearly instalments according to the convenience of the borrowers.
Kisan Credit Card (Retail Agri Loan): Kisan Credit Card Loan is a wonderful agriculture loan preference to meet short term credit needs, such as expenditures resulting from cultivation of crops, maintenance of farm equipment, post-harvest activities, etc.
Kisan Credit Card is generally obtainable in the frame of an electronic RuPay Card, which the farmers can utilise to withdraw money from ATMs to make the needed purchase. Therefore, it renders suitable credit to meet your regular farm demands.
Agricultural Gold Loan: This loan is granted to farmers against the security of gold ornaments. It may be extended for crop cultivation and other agricultural objectives as well. This loan features comparatively low-interest rates and supports farmers in unhitching the value of their gold jewellery, usually lying lazily in the house or bank locker.
Horticultural Loan: This agricultural loan is granted for the expansion of the land for installing up orchards or vegetable farms, freeing of undergrowth or wild trees, insignificant irrigation activities, establishing up boundary walls/fencing, as well as other horticultural reasons.
Forestry Loan: This agricultural loan is furnished for cultivating crops that grow on trees. Similar to horticulture loans, it can be delivered to remove the undergrowth and wild trees, transform barren land into cultivable land, settle the land by establishing up irrigation channels, and so on.
The essential documents needed by most of the lenders concerning agricultural loan are mentioned below-
The features of agriculture loans in India are showcased below-
In the table showcased below, you will get to see the interest rate of agricultural loans as extended by some major lenders:
Name of the Lender |
Interest Rate( p.a) |
Central Bank |
7.50% onwards |
State Bank of India |
7.50% onwards |
IndusInd Bank |
9.50% onwards |
Axis Bank |
In line with different schemes of the government and depends on the profile of the applicant |
ICICI Bank |
9.60% |
The table given below showcases the eligibility criteria to get an agricultural loan in India. Nevertheless, some additional criteria may also apply to some of the lenders. Therefore, you must be in touch with the particular bank in order to check your eligibility status.
Who is Eligible? |
Joint Cultivator Owners/ Individual Farmers Self Help Groups or Joint Liability Groups( Encompassing tenant farmers) Share Croppers, Tenant Farmers, and Oral Lessees |
Eligibility Criteria |
18 to 70 Years |
Residential Status |
Indian Resident |
Land Ownership |
Usually, should acquire a segment of agricultural land or must have access to agricultural land for diverse purposes |
The benefits of agricultural loan are mentioned below-
Finance Minister Nirmala Sitharaman notified an allocation of about Rs. 1.42 crore to the Ministry of Agriculture & Farmer’s Welfare in the Union Budget 2020-21.
This massive number was reserved concerning the following proposals-
Major agricultural loan providers in India are-
ICICI Bank
Types of agriculture loans in India offered by ICICI Bank are-
Union Bank
State Bank of India
Central Bank of India
NABARD
Axis Bank
Nationalised banks that are involved in offering agriculture loans in India are Oriental Bank of Commerce, Union Bank of India, Vijaya Bank, Punjab National Bank (PNB), UCO Bank, United Andhra Bank, Syndicate Bank, Bank of India, Allahabad Bank, Dena Bank, Bank of Baroda, and Indian Bank etc.
Different banks and other financial institutions are granting agriculture loans in India in order to uplift the agriculture sector and strengthen the agricultural economy by helping and encouraging our farmers. At Aatmnirbhar Sena, we are spreading awareness about numerous agriculture loans in India offered by Banks and other institutions, and we hope that you will take benefits associated with schemes concerning the agriculture segment in India.