Drip Irrigation Loan
A Drip Irrigation Loan is a type of loan that farmers in India can avail to enhance the productivity of their farm. Various banks in India offer this loan. We will have a look at some of the banks who offer this type of loan, including other benefits that come with it.
Drip Irrigation Loan by Union Bank of India
Scheme Details for Drip Irrigation System Loan
1. Purpose: Purchase and installation of drip irrigation systems.
2. Eligible Borrowers:
- Farmers with at least 1 acre of agriculture land.
- Loan sanctioned based on area under drip irrigation.
3. Nature of Facility: Term Loan.
4. Margin:
- Up to Rs.1.60 lakhs: Nil.
- Above Rs.1.60 lakhs: 15%.
5. Loan Amount: As per NABARD unit cost & guidelines.
6. Rate of Interest: As per the scheme.
SBI Composite Minor Irrigation
1. Type of Facility: Agriculture Term Loan
2. Quantum of Loan:
- Minimum: Rs. 10,000
- Maximum: Rs.49 lakh
3. Margin: 15% to 25% of the project cost
4. Moratorium:12 months
5. Repayment: Maximum of 24 half-yearly installments after the moratorium period
6. Security:
- Up to Rs.1.60 lakh:
- Primary: Hypothecation of movable assets created
- Collateral: Nil
7. Above Rs.1.60 lakh:
- Primary: Hypothecation of movable assets created
- Collateral: Mortgage or charge on land
8. Interest Subvention: Not applicable
9. Interest Rate and Fees:
Interest Rate | One-Year MCLR+3.60% |
Processing Fee |
|
Bank of Baroda Financing Irrigation
- Zero Margin on Total Loan Up to Rs.1 Lakh
- Free processing fees for combined loans up to Rs.3 lakhs
- No inspection fees up to a total loan amount of Rs 3.00 lakh; long-term repayment option available.
Processing fees:
- Total Agriculture Exposure of Rs.3.00 Lakhs: Nil
- Exceeding Rs.3 Lakhs: 1% of the authorised amount, up to a cap of Rs.1 crore.
Inspection Fees:
- Exposure to agriculture up to Rs.3.00 Lakh: Nil;
- Over Rs.3 lakhs to Rs.10 Lakhs: Rs.250;
- Exceeding Rs.10 Lakhs to Rs.1 Crore: Rs.1000;
- Exceeding Rs.1 Crore: Rs.5000
Documents Required
The documents typically required to apply for a drip irrigation loan are:
- Properly completed application
- Identity documentation: driver's licence, voter ID card, PAN card, passport, Aadhaar card, etc.
- Evidence of farmland or farming.
- any additional document that is authorised.
FAQs on Drip Irrigation Loan
- Is it profitable to use drip irrigation?
By precisely delivering water to plant roots, drip irrigation systems maximise water efficiency, lower water costs, and conserve resources—all of which have a substantial positive economic impact. By reducing the need for manual irrigation management, they also save labour costs and free up resources for farmers to use more wisely.
- What is the cost of drip irrigation per acre?
In India, installing a drip irrigation system on an acre of land will likely cost between Rs.45,000 and Rs.60,000.
- What is the irrigation industry's profit margin?
Installation profit margins are typically between 15 and 20 percent, and maintenance profit margins are often between 30 and 40 percent.
- How is the MIF determined?
The amount that a claimant must look for and be available for employment each week multiplied by the National Minimum Wage (NMW) for their age or the National Living Wage (NLW) for those over 25 is known as the Minimum Income Floor level.
- What is drip irrigation's profit margin?
By providing water and nutrients to the roots of plants directly, drip irrigation can enhance their overall health. supplies water to the roots gradually and uniformly, which helps to minimise soil erosion and runoff.
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