An Agriculture Loan is a financial product designed to meet the credit needs of farmers and agribusinesses. It provides funding for various agricultural purposes such as crop production, equipment purchase, irrigation setup, livestock farming, land improvement, and other allied agricultural activities.

These loans are offered by banks, cooperative societies, regional rural banks (RRBs), and non-banking financial companies (NBFCs), often with subsidies and interest benefits from the government.

Advantages of Agriculture Loan

  1. Flexible Loan Usage
    Funds can be used for diverse agricultural purposes—crop cultivation, irrigation, machinery, or warehousing.

  2. Low Interest Rates
    Subsidized interest rates under government schemes like Kisan Credit Card (KCC) or PM Kisan Yojana.

  3. Seasonal Repayment Options
    Repayment schedules are aligned with crop cycles to reduce financial burden.

  4. Collateral-Free Loans
    Small loans (especially under KCC) may be offered without collateral, depending on the loan amount and borrower profile.

  5. Government Subsidies & Support
    Eligible farmers can receive subsidies, insurance benefits, and relief during crop failure.

  6. Improves Farm Productivity
    Enables farmers to invest in better seeds, fertilizers, machinery, and irrigation systems.

  7. Credit for Allied Activities
    Loans are also available for dairy, poultry, fisheries, and agro-processing units.

Eligibility Criteria

Eligibility may vary based on the lender and purpose of the loan, but typically includes:

  1. Eligible Applicants

  2. Agri-businesses and farmer producer organizations (FPOs)

  3. Self-help groups (SHGs) involved in agriculture

  4. Tenant farmers, sharecroppers, or oral lessees (with necessary proof)

  5. Joint landowners

  6. Individual farmers

  7. Age Criteria

  8. Maximum age: 70 years (may vary by bank)

  9. Minimum age: 18 years

  10. Purpose of Loan

  11. Crop production, land development, farm mechanization, irrigation, horticulture, allied agricultural activities, etc.

  12. Repayment Capacity

  13. Based on the size of land, type of crop, estimated yield, and previous credit history.

Documents Required

KYC Documents:

Aadhaar Card

PAN Card (if applicable)

Passport-size photographs

Voter ID / Driving License / Passport (for identity and address proof)

Land and Agricultural Proof:

Land ownership documents (7/12 extract, land deed, record of rights)

Land lease agreement (for tenant farmers)

Soil health card (if required)

Crop pattern and yield estimate (if applicable)

Income/Banking Documents:

Bank account statement (last 6 months)

Past loan repayment records (if any)

Proof of income (if available)

Additional Documents (if applicable):

Project report for high-value loans (e.g., for dairy, poultry, irrigation)

Quotation for machinery or equipment

Registration documents of SHG or FPO (if applying under group scheme)