Agriculture Loan

What is an Agriculture Loan?

An agriculture loan is a type of financial assistance provided by banks and financial institutions to farmers, agribusiness owners, and individuals engaged in agricultural activities. It helps in meeting expenses related to farming operations such as buying seeds, fertilizers, irrigation systems, machinery, livestock, land development, or even marketing of produce.

Benefits of Agriculture Loan

Easy Access to Funds

Farmers can get quick financing to meet their cultivation needs.

Low Interest Rates

Compared to personal or business loans, agricultural loans often have subsidized or lower interest rates.

Flexible Repayment Options

Repayment is usually linked to crop harvesting cycles or income patterns.

Government Subsidies & Support

Many loans are eligible for interest subvention schemes and government support programs.

Wide Usage

Funds can be used for:

Purchase of seeds, fertilizers, pesticides

Farm mechanization (tractors, equipment)

Irrigation systems and infrastructure

Livestock and poultry farming

Warehouse and cold storage setup

Credit for Short-term & Long-term Needs

Covers seasonal cultivation expenses as well as long-term investments like land development.

Eligibility Criteria

Eligibility may vary by lender, but generally includes:

Applicant Type:

Individual farmers (owner, tenant, sharecropper)

Joint farmers or self-help groups (SHGs)

Agribusiness enterprises

Age Limit:

Usually 18–70 years (varies by lender)

Occupation:

Must be engaged in agricultural or allied activities (dairy, poultry, fisheries, horticulture)

Creditworthiness:

Satisfactory repayment history (if applicable)

Documents Required

Typically, the following documents are needed:

Identity Proof (Any one):

Aadhaar Card

Voter ID

PAN Card

Passport

Address Proof:

Aadhaar Card

Electricity Bill

Ration Card

Land Ownership Proof (for crop loans):

Land records or Title deed

Lease agreement (for tenant farmers)

Income Proof (if required):

Bank statements

Previous loan repayment record

Photographs (Passport size)

KYC Documents as per lender norms