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PM launches Financing Facility under Agriculture Infrastructure Fund.

Agriculture Infrastructure Fund

Indian Prime Minister Narendra Modi launched a financing facility on 9th August 2020 of 1 lakh crore rupees under the agriculture infrastructure fund. This facility is set to support agri-entrepreneurs, start-ups, agric-tech players, etc. in building community farming assets post-harvest agriculture infrastructure.

What is Agriculture Infrastructure Fund?

The Indian Government had approved the setting up of an agri-infra fund last month with a corpus of 1 lakh crore rupees to extend subsidized credit for farm infrastructure projects.

The agri-infra fund is a medium to long-term debt financing facility for investment in viable projects for the post-harvest management infrastructure and community farming assets with interest subvention and credit guarantee. It may be noted that the scheme under the financing facility will be in duration for ten years from FY 2020 to FY 2029.  

Under the scheme, 1 lakh crore rupees will be provided by banks and financial institutions as a loan with interest subvention of 3 percent per annum and credit guarantee coverage under the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) scheme for loans up to 2 crore rupees.

Who will manage the agri-infra fund?

The Agri-infra fund will be managed and monitored via an Online Management Information System (MIS) platform. It will allow all the qualified entities to apply for a loan under the fund.

The online Management Information System platform will also provide benefits like the transparency of interest rates offered by multiple banks, the scheme details, including interest subvention and credit guarantee offered.  It shall also comprise of minimal documentation and faster approval process and integration with other scheme benefits.

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Who is eligible to apply for a loan under the Agriculture Infrastructure Fund?

The following can apply for a loan under the agri-infra fund:

  • Farmers;
  • Marketing Co-operative Societies;
  • Multi-purpose Co-operative Societies;
  • Farmer Producer Organization;
  • Start-ups;
  • Primary Agriculture Credit Societies;
  • Self-help groups;
  • Joint Liability groups; and
  • Agri-entrepreneurs.

What are the benefits of the agri-infra fund as stated by the Indian Prime Minister?

The potential benefits of this scheme are as mentioned below:

  • Under this scheme, loans can be taken by eligible entities that can be used to build cold storage, collection centers, processing units, etc. which will help farmers to protect their perishable products for a longer duration and also derive better prices from it.
  • As per the Indian PM, the scheme will provide a financial boost to the farmers and agriculture sector and also increase India’s ability to compete on the global front.
  • The scheme also provides an opportunity for start-ups in agriculture to avail the benefits and scale their operations, thereby creating an ecosystem that farmers can avail from different parts of the country.
  • The move to facilitate formal credit to farm and farm processing based activities is also expected to boost private investments and generate more jobs in rural areas.
  • The scheme is also expected to ensure the welfare and sustainability of livelihoods for the farmers in India.

What is PM Kisan Scheme?

Pradhan Mantri Kisan Samman Nidhi (PM Kisan Scheme) is a central sector scheme with 100 percent funding from the Government of India. It is an ongoing scheme that was implemented in 2018. This scheme was launched to provide support by way of the cash benefit to all landholding farmers to enable them to fulfill their agricultural needs and to support their families. A financial benefit of 6000 rupees per year is given to eligible beneficiary farmers in 3 equal installments.

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Along with the agriculture infrastructure fund the Prime Minister also released the sixth installment of 17, 100 crore rupees under the PM-Kisan Scheme to more than 8.55 crore farmer beneficiaries.


The Agriculture Infrastructure Fund also provides for a moratorium. The moratorium for repayment under the financing facility can differ subject to a minimum of six months and a maximum of two years.  

Read our article:Pradhan Mantri Kisan Samman Nidhi Scheme

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