- Explains what farm credit services are and why they are important for Indian farmers.
- Details the types of farm loans – short, medium, and long-term – and their uses.
- Lists the main providers including banks, co-operatives, and NABARD.
- Covers popular government schemes like Kisan Credit Card and PM Fasal Bima Yojana.
- Shares eligibility criteria, required documents, and the application process.
- Highlights the benefits such as low interest rates, subsidies, and flexible repayment
India’s agriculture sector supports over 50% of the population and contributes ~18% to GDP, yet most farmers still face financial stress. Buying quality seeds, fertilisers, modern equipment, and irrigation systems requires money — and this is where farm credit services step in.
These are special loan facilities tailored for farmers to meet agricultural and allied needs, offered by banks, co-operative societies, and government-backed programs.
What Are Farm Credit Services?
In simple terms, farm credit services are financial loans and facilities designed exclusively for the agricultural sector. Unlike personal or business loans, these have:
- Lower interest rates
- Flexible repayment schedules linked to crop harvesting seasons
- Subsidies from the government
They cover crop production, livestock farming, irrigation projects, storage facilities, and farm machinery purchases.
Types of Farm Credit Services in India
| Type of Loan | Purpose | Repayment Period |
| Short-term | Seeds, fertilisers, and daily farm expenses | 6–18 months |
| Medium-term | Machinery, irrigation, livestock | 1–5 years |
| Long-term | Land purchase, tractors, infrastructure | 5–15 years |
Types of Farm Credit Services in India
1. Short-Term Farm Loans
- Purpose: These are loans taken for seasonal or immediate farming needs, like buying seeds, fertilisers, pesticides, paying labour, or meeting irrigation expenses during the crop season.
- Loan Amount: Usually smaller amounts compared to other loans, enough to cover one cropping cycle.
- Repayment Period: 6–18 months – repayment is expected after the harvest, when farmers earn from selling their crops.
- Best For: Farmers who need quick working capital to start or maintain crop production without high costs.
Example: A farmer takes ₹50,000 before the sowing season to buy seeds and fertilisers, then repays the loan after selling the harvest in 8 months.
2. Medium-Term Farm Loans
- Purpose: These loans are used for development activities that are bigger investments than seasonal expenses but not as long-term as buying land.
- Common uses include purchasing farm machinery (tractors, threshers, harvesters), installing irrigation systems, setting up dairy or poultry farms, or building small storage sheds.
- Loan Amount: Usually between ₹3 lakh to ₹10 lakh, depending on the project.
- Repayment Period: 1–5 years – repaid in instalments, often annually or semi-annually.
- Best For: Farmers upgrading their farm operations or diversifying into allied activities like livestock or fisheries.
Example: A farmer buys a ₹5 lakh tractor and repays the loan over 4 years in equal instalments after each harvest season.
3. Long-Term Farm Loans
- Purpose: These are for major agricultural investments that require large capital and take several years to pay back.
- Common uses include buying farmland, building large warehouses, purchasing high-end tractors or harvesters, installing large irrigation projects, or setting up agricultural infrastructure like cold storage units.
- Loan Amount: ₹10 lakh or more, depending on the project scale.
- Repayment Period: 5–15 years – repayment schedules are longer because these projects take time to generate income.
- Best For: Farmers who want to expand their landholding, start large-scale farming, or build infrastructure for long-term income.
Example: A farmer buys 3 acres of land for ₹25 lakh and repays the loan over 12 years, using income from farming and leasing part of the land.
Main Providers of Farm Credit Services
- Public Sector Banks – SBI, PNB, Bank of Baroda
- Private Banks – HDFC Bank, ICICI Bank
- Co-operative Banks – State and district co-operatives
- Regional Rural Banks (RRBs) – Supported by NABARD
- NBFCs – Private finance companies
- Microfinance Institutions (MFIs) – For small and marginal farmers
Government Schemes Under Farm Credit Services
| Scheme Name | Key Benefit | Interest Rate* |
| Kisan Credit Card (KCC) | Instant credit for seeds, fertilisers, and insurance cover | 4% p.a. (with subsidy) |
| PM Fasal Bima Yojana | Crop insurance for losses | Subsidized premium |
| Agriculture Infrastructure Fund | Warehouse & cold storage credit | 3% interest subvention |
| NABARD Refinance Scheme | Low-cost funds for banks | Varies |
Benefits of Farm Credit Services
- Low interest rates compared to personal loans
- Flexible repayment aligned with harvest seasons
- Collateral-free for small loans (up to ₹1.6 lakh)
- Access to subsidies and government insurance
- Encourages modern farming & technology adoption
- Helps farmers during crop failures or emergencies
Eligibility Criteria
- Indian citizen engaged in farming or allied activities
- Age 18–70 years
- Land ownership proof or lease agreement (for tenant farmers)
- Valid Aadhaar, PAN, and bank account
Documents Required
- Aadhaar Card – For identity verification and linking with the loan account.
- PAN Card – For financial records and income tax-related verification.
- Land Ownership/Lease Proof – To confirm farming activity and eligibility for the loan.
- Bank Passbook – To verify account details for loan disbursement and repayment.
- Income Proof (if applicable) – To assess repayment capacity, especially for larger loans.
- Passport-Size Photo – For official loan application and KYC documentation.
How to Apply for Farm Credit Services
Offline Process:
- Visit the bank/co-operative society branch.
- Fill out the farm loan application form.
- Attach documents.
- Loan verification and sanction.
Online Process:
- Visit the bank/NABARD website – Start by going to the official bank or NABARD website to access authentic loan options.
- Select the loan scheme – Choose the specific poultry farming loan scheme that best suits your requirements.
- Fill the application form online – Enter accurate details in the online application form to avoid rejection.
- Upload scanned documents – Attach clear, valid copies of the required documents in the specified format.
- Wait for approval – The bank will verify your details and inform you about approval or further steps.
Tip: Always check if the loan offers an interest subvention (government interest subsidy) before applying.
Key Takeaways
- Farm credit services are a lifeline for Indian farmers.
- Multiple loan types cater to crop, livestock, and infrastructure needs.
- Government schemes like KCC make credit more affordable.
- Digital platforms have made applying for loans easier.
- Timely repayments improve future loan eligibility.
Conclusion
Farm credit services in India are more than just loans — they’re an investment in the nation’s food security. By giving farmers affordable financing, flexible repayment options, and access to subsidies, they help improve crop yields, promote modern agriculture, and support rural development. Every farmer, big or small, should explore these options to grow sustainably.
Explore more blogs to boost your farming knowledge and make smarter agri-business moves.
FAQs
Special loans for farmers to meet agricultural needs.
Farmers, tenant farmers, and rural entrepreneurs.
Not for small loans (up to ₹1.6 lakh).
Usually 4–9% p.a. with subsidies.
Yes, through the bank and NABARD websites.
Many schemes include crop insurance.
From 6 months to 15 years.
Kisan Credit Card (KCC).
Aadhaar, PAN, land proof, photo, and bank details.
Yes, under medium and long-term loans.
