Have you been wanting to get proper funds for setting up and enhancing your dairy farm business? You can apply for a loan in India to take care of the operations of your dairy farm business. Banks and non-banking financial companies (NBFCs) in the country now have exclusive loans for funding dairy farm business operations. These loans are known as dairy farm business loans.
The dairy farm sector is among the biggest industries in rural India, and 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.
With the help of this loan, you do not have to force yourself to utilise your savings for your business activities. 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.
To handle these costs, it does not make sense to use personal funds. It is always better to utilise a loan for such expenses. With the availability of dairy farm business loans, you can meet your specific business needs in an appropriate manner.
Dairy farming is an unorganised sector and hence, it is very difficult to raise funds for the purpose of carrying out operations. There are many organisations and banks that are committed to making the dairy farming sector better in the country. They are introducing new dairy farm schemes and launching other schemes to improve the overall dairy farming process and make it more hygienic.
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.
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:
Individuals who wish to apply for a dairy farm business loan must submit a few documents to the lender before their application can be accepted. These documents include photographs, land records, project reports and proof of identity. If the individual requires funds to establish a new small dairy unit with only two to four mulch cattle, a project report need not necessarily be required. However, project reports are essential for commercial dairy units.
The applicant will have to obtain a few security documents from the branch, including the CHA-II (Composite Hypothecation Agreement). This document should include clauses on non-diversion of securitisation and funds, or annexure as per Br Cir No 97/186 dated 8th March, 2004. Also required is the DP Note, L-515, Deed of Declaration of Land whenever required or legal or Equitable Mortgage. The applicant will also have to furnish Third Party Guarantee (OD-194), where required.
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