Purpose – Loan is provided to cover short term working capital for agriculture activities, other domestic requirements such as education, consumable items, medical expenses, etc., term credit needs of the farmers and credit against of debt from non-institutional lenders.
Eligibility – Progressive literate and illiterate farmers who are owner cultivators, tenants, and lessee or allotted farmers with recorded occupancy rights or farmers with ancestral/perpetual rights of cultivation. Oral tenants can be eligible for loan only if land owners agree to become co-borrowers.
Extent of Loan – Maximum Rs.10 lakh
Maximum limit of Rs 10 lakh is allowed as under: Maximum Rs 5 lakh for cash credit limit for crop production, consumption needs & working capital for allied activities. Need based term loan within overall ceiling of Rs 10 lakh including cash credit limit mentioned above & loan (maximum up to Rs.50, 000) for relief against indebtedness from non-institutional money-lenders
Fixation of limit – Limit is fixed for term loan and working capital requirement limit for agricultural and allied activities, etc., based on the unit cost of the asset/s proposed to be acquired by the farmer, the allied activities already being undertaken on the farm, repaying capacity.
Repayment of Loan : Term loan including loan for relief against indebtedness from non-institutional lenders may be repayable in 5 years. However, in case of term loan where repayment period is more than 5 years, longer repayment period as prescribed under the respective scheme is allowed.