Objective

Credit to meet the requirement of FPO/FPC's

Nature and
Purpose of
Advance

Term loan and need based Working capital for:

i) Short term finance for crop production/ Allied purpose

ii) Input stocking/ purchase

iii) Aggregation of produce from members

iv) Term Loan for infrastructure/ Custom service etc.

v) Financing warehouse receipt / Negotiable warehouse receipt

Quantum of Loan

Minimum- No minimum

Maximum- Rs. 10.00 cr

Eligibility

Farmer Producer Companies/Organizations shall be registered under legal provisions i.e., Cooperatives/ Producer Companies/ Farmer Producer Companies/Societies/Trust/ Section 8 company/ under part - IXA of companies act etc.

Members and stake holders of the FPO/FPC's shall be Farmer/ Milk Producers/Fishermen/Weavers/Rural artisans/Institution of primary producers

FPO/FPC's must have at least latest one audited Balance sheet for availing loan and should have positive net worth.

Security

Prime Security: Hypothecation of assets created out of Bank finance/pledge of warehouse receipts. In case of FPO/FPCs is registered as company, charge on assets must be created with Registrar of companies as per the extant guidelines.

Collateral Security:  For loan amount up to Rs.2.00 cr, where credit guarantee coverage is available, no collateral security to be insisted.

In all other cases:

up to Rs. 2.00 Lakhs - Hypothecation of assets created out of finance.

Above Rs. 2.00 Lakhs: The credit facility should be fully secured by liquid assets / immovable property (SARFAESI complied). While fixing the value of the immovable property provided as security Fair Market value of the property is to be considered.

Overall collateral coverage should not be less than 75% of the loan amount.

However, RLCC can consider relaxation in collateral coverage up to 50% RLCC can consider other than SARFAESI complied immovable properties.

Deviation in collateral coverage less than 50% can be taken up with the next higher layer of authority.

Credit Guarantee

Credit guarantee coverage under CGS-FPO scheme is available provided by NABSANRAKSHAN (subsidiary of NABARD) up to Rs. 2.00 cr.

Eligible activities for Credit guarantee:

Supply quality production inputs like seed, fertilizer, pesticides, and such other inputs at reasonably lower wholesale rates.

Make available need-based production and post-production machinery and equipment like cultivator, tiller, sprinkler set, combine harvester and such other machinery and equipment on custom hiring basis for members to reduce the per unit production cost.

Make available value addition like cleaning, assaying, sorting, grading, packing and farm level processing facilities at user charge basis on reasonably cheaper rate. Storage and transportation facilities may also be made available.

Undertake higher income generating activities like seed production, bee keeping, mushroom cultivation etc.

Undertake aggregation of smaller lots of farmer-members' produce; add value to make them more marketable.

Facilitate market information about the produce for judicious decision in production and marketing.

Facilitate logistics services such as storage, transportation, loading/unloading etc. on shared cost basis.

Market the aggregated produce with better negotiation strength to the buyers and in the marketing, channels offering better and remunerative prices.

Activities eligible under Agriculture Infrastructure Fund.

Other eligibilities:

The FPO/FPCs should have a minimum capital of Rs. 5.00 Lakhs

The minimum number of farmer producer in FPC is 500 & for FPO in plain areas is 300 and North-eastern & Hilly areas which are 1000 metres above sea level, size of 100 will be considered.

Margin

Term Loan & Working capital-

Up to Rs.2,00,000/- - Nil

Above Rs. 2,00,000/- - 10%

If assessment is based on scale of finance, no additional margin to be considered.

Repayment

Maximum 10 years

Rate of Interest

Processing Charges

Up to Rs.50,000/-: Nil

Above Rs.50,000/-: 0.20% of loan amount + applicable GST to be collected (both for term loan & working capital)