Individuals who wish to start and operate their own farms or make improvements to their existing farms can now make the most of dairy farm business loans. The reasons for taking out a loan like this can be to establish small dairy units that have two to four mulch cattle, to collect, process, and distribute milk, to establish a new medium or large dairy unit, to manufacture milk products, to construct cattle shad, or to buy crossbreed or improved mulch cattle.
For your dairy farm business, you will most likely incur expenses related to purchase of raw materials, dairy production processes, dairy product processing, dairy product storage, packaging, warehousing, etc. You would also incur costs associated with taking care of animal species that help in the production of dairy products.
Given below are the reasons for which you can avail a dairy farm loan:
Some of the features and benefits of availing a dairy farm loan are:
A dairy farm business loan is a Working Capital Term Loan that can be availed by agriculture labourers, farmers, limited companies, SHGs, registered partnership firms, and dairy co-operative societies. The amount of money that is granted to applicants can range up to Rs. 100,000 for the hypothecation of live stocks. Loan amounts offered to customers can also exceed Rs. 100,000 for the hypothecation of live stocks, or land mortgage, or declaration as per the agricultural credit act, or collateral security of sufficient worth, or third party assurance if stipulated.
The profit margin for loans up to Rs. 100,000 is nil, and loans more than Rs. 100,000 provide a profit margin ranging from 15% to 25%. The rate of interest will differ based on the lender and the structure of the loan. The repayment period is usually between five and six years, and most lenders also provide a moratorium period of two to three months.
The National Bank for Agriculture and Rural Development (NABARD) is highly dedicated towards improving all types of agricultural activities. With the goal of bettering dairy farming, the organisation recently launched the Dairy Entrepreneurship Development Scheme (DEDS). This scheme offers financial assistance to those who want to take up dairy farming. It also aims at increasing employment opportunities in modern dairy farms. While applying for financial support through the DEDS from NABARD, you need to ensure that you have not defaulted any of your previous loans.
| Interest rate | May depend from bank to bank |
| Tenure of loan | 3 years and 7 years |
| Pre-closure charges | Nil |
| Repayment mode | EMIs |
| Processing fees | 2% of the loan amount. |
The list of documents you will need to apply for a dairy farm loan is:
There are various lenders in India who offer dairy farm loan online. You can visit the official website of the lender who offers this type of loan and apply for a dairy farm loan. All you have to do is fill the application form and submit it along with the necessary documents. The bank will review the application form and if they found to be correct, they will approve your loan application and will disburse the said loan amount to your bank account.
You can also apply for a dairy farm loan offline as well. All you have to do is visit the branch of the bank which offers a dairy farm loan along with the necessary documents. A representative from the bank will help you with the process of applying for a personal loan.
The Dairy Entrepreneurship Development Scheme (DEDS) provides proficient financial assistance to individuals and firms under different categories:
The Dairy Entrepreneurship Development Scheme (DEDS) can be taken by the following:
Before you decide to make use of the Dairy Entrepreneurship Development Scheme (DEDS), you should be aware of how it works:
With the help of the Dairy Entrepreneurship Development Scheme (DEDS), the NABARD aims to achieve a few important aspects in dairy farming. The primary goals of the DEDS include:
With the help of a dairy farm business loan, one can use the funds for numerous purposes. Some of the purposes include:
Generally, the lender may not charge any foreclosure charges if you wish to foreclose your loan account provided you have paid the first EMI. However, this rule may apply from lender to lender.
There are various lenders in India who offer dairy farm loans to its customers. Some of the lenders from whom you can avail a dairy farm loan are:
Yes, generally a grace period ranging between 3 months and 6 months is provided. However, not every lender may provide this facility and hence you must ensure you check with the lender whether a grace period is provided before availing a dairy farm loan.
Yes, you can now avail Mudra Loan under Pradhan Mantri Mudra Yojana if you wish to raise capital for your dairy farming business. You can also avail Mudra Loan if you own or wish to own fisheries, poultry farms, honeybee farming, silk industry etc. and need capital to kick off your business.
If you are availing a loan of Rs.1 lakh and less, then a hypothecation of livestock will be required. However, if you are availing a loan with amount above Rs.1 lakh, then you may have to pledge your livestock, mortgage your land, or get a third-party guarantee as a collateral. However, these requirements may depend from lender to lender.
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