Agriculture Loan

An agriculture loan is an overdraft facility which could be used to meet the cost of farming, cultivation and working capital activities for agri-business and associated activities. This loan could also be used for buying cattle, purchase of equipment for farming and irrigation and other agricultural requirements. Agriculture loans are generally low interest loans that farmers can avail to run their farming business more efficiently.
Eligibility: A farmer who is member of the PACS, PCARD bank are eligible to avail Agricultural loans.

a)Short Term Loan : The loans given under Kisan Credit Card (KCC) for raising the crops for the period of 12 months to 18 months are classified as crop loans. A farmer can operate the loan account whenever he wants i.e He can draw and remit the amount as many times as possible. Interest will be charged only on the outstanding portion of the loan account. He can deposit his savings in to the KCC account and have credit balance also.

Types of STL :

1. MKCCL
2. Pashu Bhagya Loan

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b) Medium Term Loan : Loans given for creation of assets which will increase the production and productivity of agriculture and allied activities usually for a period of 5 to 7     years and 7 to 12 years are called as medium term and long term agriculture loans respectively as per NABARD classification.

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c) Long term Loan : A form of debt that is paid off over an extended time frame that exceeds one year in duration. Obtaining a long term loan provides a business with working capital that it can use to purchase assets, inventory or equipment which can then be used to create additional income for the business.

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