We have compiled a list with the top five banks that provide easy loans for farmers in India.
1. State Bank of India (SBI).
State Bank of India (SBI), is one of the leading banks in agrifinancing. It serves nearly 1.01 million farmers through its extensive network of over 16,000 branches in India. It offers many types of loans for agriculture.
- Nominal-interest rates
- No intermediaries
- No hidden fees
- Instant loan approval and disbursement
SBI Agri Loans are available to agricultural and related activities. For crop production, loans are available in the form KCC (Kisan Credit Card). The loan can be used to pay crop production costs, post-harvest costs, and emergency expenses.
Kisan Credit Card (KCC), is available in electronic RuPay Card. The card allows farmers to withdraw money from ATMs and purchase fertilizers at PoS. SBI Agri loans can also be used to purchase equipment such as tractors and combined harvesters. The bank offers loans to meet the financial requirements of allied activities like poultry, dairy, and fisheries.
2. ICICI Bank
The ICICI Bank agriculture loan allows farmers the opportunity to buy farm animals and invest in agricultural equipment. These loans can be repaid over a 3 to 4 year period. Based on the individual’s convenience, EMIs may be either monthly, half-yearly, or annually.
ICICI Agri loans require minimal documentation. They also offer flexible repayment options with no hidden fees. Farmers must complete an application form and submit KYC documents, property documents, and, in certain cases, post-dated cheques.
Farmers can also get Kisan Credit Cards from ICICI Bank. The card allows farmers to withdraw cash from any ATM in India. KCC is only available to those who have the necessary farming land. A person must be aged between 18 and 70 years.
3. HDFC Bank
HDFC, India’s leading private sector bank, is committed to maximising all financial and banking benefits across India. The bank has a strong focus on rural areas, primarily the agriculture sector. Customers who are involved in agriculture, horticulture and poultry, as well as animal husbandry, can apply for agricultural loans with different terms from HDFC bank.
The bank can also provide financial assistance to purchase micro-irrigation equipment, seeds, pesticides, and micronutrients.
HDFC bank has identified food processing and other agriculture-related activities as its focus area. Therefore, they offer both working capital loans and term loans to qualified applicants. The applicant’s financial status and the market value of the underlying commodities will be considered when determining the amount of the loan. HDFC bank expands its rural presence to offer all financial products at affordable prices to its clients.
4. Punjab National Bank (PNB)
Punjab National Bank offers a variety of financial products that are related to the agriculture sector. PNB can provide loans to individuals for the purchase of equipment, setting up biogas units, and developing wastelands. The bank offers financial assistance to those who want to pursue apiculture, also known as beekeeping.
PNB also provides financing for warehouse receipt. PNB also provides financial support and insurance for growers in the event of crop failure due to natural disasters, diseases or pest infestations. Pradhan Mantri Bima Yojana is the name of this scheme. These services are in addition to the regular financial services that farmers receive, such as Kisan Credit Card and debt swap.
5. Axis Bank
Axis Bank has been providing financial services to the farming community for many decades. These include tractor loans and Kisan Credit Card, warehouse receipt financing and gold loans. Contract Farming is also offered by the Bank. This caters to the financial requirements of both farmers and corporations through a combination agreement. The bank will quickly release financial assistance and provide support for production and the supply of the product. Fair Practices Lending Code is responsible for managing this arrangement.
Axis Bank also offers pisciculture loans that are designed to meet the needs of farmers quickly. This loan is especially for farmers involved in freshwater fish and prawn cultivation.
How to get an agricultural loan at a low interest rate?
These are some tips to help farmers get an agricultural loan at a competitive interest rate.
- One of the greatest advantages you have is a high credit score. A high credit score is a sign of your creditworthiness. This is an advantage in applying for loans, including agricultural loans.
- Make sure that your debt-to-income ratio is as low as possible. This will indicate a greater repayment ability.
- Your credit utilization ratio should not exceed 30%. This shows that you don’t need credit and increases your chances of getting a loan sanctioned.
- It is best not to apply for multiple loans simultaneously. This can make you appear as a high-risk borrower, and negatively impact your credit score.