Agriculture Infrastructure Fund is approved by Union Cabinet

Provides a medium – long term debt financing facility for post-harvest management Infrastructure

• The Union Cabinet chaired by the Prime Minister has given its approval to a
  new pan India Central Sector Scheme-Agriculture Infrastructure Fund
• The scheme shall provide a medium – long term debt financing facility for
  investment in viable projects for post-harvest management Infrastructure
• The loans will be availed by the Farmer Producer Organizations (FPOs),
  Startups, Primary Agricultural Credit Societies, Agri- entrepreneurs, etc

Salient key points of Agriculture Infrastructure Fund

• The scheme shall provide a medium – long term debt financing facility for
  investment in viable projects for post-harvest management Infrastructure and
  community farming assets through interest subvention and financial support
• Under the scheme, Rs.1 Lakh Crore will be provided by banks and financial
  institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing
  Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group
  (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative
  Societies
• Also for Agri-entrepreneurs, Startups, Aggregation Infrastructure Providers and
  Central/State agency or Local Body sponsored Public Private Partnership
  Project
• Loans will be disbursed in four years starting with sanction of Rs. 10,000 crore
  in the current year and Rs. 30,000 crore each in next three financial years
• All loans under this financing facility will have interest subvention of 3% per
  annum up to a limit of Rs. 2 crore. This subvention will be available for a
  maximum period of seven years
• Further, credit guarantee coverage will be available for eligible borrowers from
  this financing facility under Credit Guarantee Fund Trust for Micro and Small
  Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore. The fee for this
  coverage will be paid by the Government
• In case of FPOs the credit guarantee may be availed from the facility created
  under FPO promotion scheme of Department of Agriculture, Cooperation &
  Farmers Welfare (DACFW)
• Moratorium for repayment under this financing facility may vary subject to
  minimum of 6 months and maximum of 2 years

Advantages of Agriculture Infrastructure Fund

• The Project by way of facilitating formal credit to farm and farm processingbased activities is expected to create numerous job opportunities in rural areas
• Agriculture Infra fund will be managed and monitored through an online
  Management Information System (MIS) platform
• It will enable all the qualified entities to apply for loan under the fund
• The online platform will also provide benefits such as transparency of interest
  rates offered by multiple banks, scheme details including interest subvention
  and credit guarantee offered, minimum documentation, faster approval process
  as also integration with other scheme benefits
• The National, State and District level Monitoring Committees will be set up to
  ensure real-time monitoring and effective feed-back

What is “Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) scheme”?

• It was launched by the Government of India (GoI) to make available collateralfree credit to the micro and small enterprise sector
• Both the existing and the new enterprises are eligible to be covered under the
  scheme
• The Ministry of Micro, Small and Medium Enterprises, Government and Small
  Industries Development Bank of India (SIDBI), established a Trust named
  Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to
  implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises

Pic courtesy : newsonair.com