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About Animal Husbandry Loan
Even decades after independence, India predominately is an agrarian economy. For many people, the term agriculture means only working on the field and growing crops. This is a limited meaning of the term agriculture. In reality, the term agriculture includes many other streams and segments.
A key segment of agriculture is animal husbandry. Animal husbandry refers to the raising and selective breeding of livestock. The farmer, in this case, the person taking care of the animals uses the farm animals for the supply of milk, meat, eggs, wool, hides.
There are a number of farmers in India associated with animal husbandry. These farmers like many others in India suffer from many hardships and a constant need for funds to maintain their occupation. In order to support these farmers and to ensure that they get timely access to funds, the Government has initiated many welfare schemes. Apart from these schemes, there are many lenders that provide specific loans for animal husbandry.
What is the eligibility for an animal husbandry loan?
Animal husbandry loans are part of the agricultural loans and schemes provided by the lenders and the Government of India. These loans are a popular loan segment under this category and have been used by many farmers across the country to ensure a steady profession.
Every lender has its own unique set of eligibility guidelines that are to be met by the applicants to be eligible for animal husbandry loans. Some of the common eligibility criteria for animal husbandry loans are mentioned below.
Eligible applicants
The eligible applicants are any of the following entities,
- Farmers
- Dairy/ poultry farmers
- Individual or joint borrowers (including tenant farmers)
- Joint Liability Groups (JLG)
- Self Help Groups (SHG)
- Private companies
- MSME
- Farmer Producer Organizations
- Section 8 companies
Eligible occupations
The eligible occupations for animal husbandry loans are rearing dairy animals, meat processing, or animal feed plans.
What are the common features of animal husbandry loans?
The animal husbandry loans are provided to give financial help to the farmers in their occupation. The features of the loans provided by the lenders are different based on their guidelines. Some of the common features of these loans are provided hereunder.
| Category | Details |
|---|---|
Quantum of loan | The loan amount given by lenders depends on the credit profile of the applicant and the guidelines of the lender. Usually, the loan amount ranges from 75% to 100% of the cost of asset or project cost. |
Tenure of loan | Animal husbandry loans are long term loans with an average tenure of 7 years to 10 years. These loans can be repaid in easy and flexible EMIs as per the arrangement between the lender and the borrower. |
Rate of Interest | The rate of interest is another important factor to be reviewed by the applicants. The rate of interest is usually between 7%to 12% per annum. The rate of interest is dependent on the amount of loan, credit profile of the applicant and the lender's cost of lending. |
Processing Fees | Processing charges are the nominal charges that are levied by the lender in relation to the sanction of the loan. The maximum processing charges are usually up to 5% of the loan amount approximately. These charges are based on the amount of loan and are subject to minimum and maximum charges as per the bank's guidelines. |
Part-payment and Foreclosure of loan | Lenders allow the borrowers to prepay or partly pay the loan based on certain restrictions like completion of minimum EMIs. These part payments and the foreclosure are subject to certain penalties ranging from 2% to 5% of the outstanding loan amount or the amount prepaid depending on the bank's guidelines. |
What are the documents required for the animal husbandry loan?
The lenders require the applicants to meet all the eligibility parameters set by them as well as submit the relevant documents that support their eligibility.
The usual set of documents required by lenders is the KYC documents. Some of such documents are mentioned below.
Identity proof
The applicant can submit any of the following documents as identity proof
- Aadhar card
- voter's card,
- ration card,
- PAN Card, etc.
Address proof
Following documents can be used as address proof.
- Aadhaar card
- Ration card
- utility bills
- bank statements
- Sales Tax Certificate
- Trade License
- Rent agreement or house deed, etc.
Age proof
Applicants can submit any of the following documents as age proof
Income Proof
Income proof is required to check the repayment capacity of the borrower and to safeguard the interest of the lender. Borrowers can provide any of the following documents as part of income proof
- ITR for the past 2 years
- Bank statements
Quotation for the cost of the project for the asset
FAQs – Animal Husbandry Loan
1. Where can a person get an animal husbandry loan?
A. Animal Husbandry loans can be available from any private or public sector bank.
2. What are some of the schemes launched by the Government for animal husbandry?
A. The State Government and Central Government of the country has launched several schemes to help the farmers and eligible applicants get the required financial and other forms of assistance for their occupation. Some of the popular schemes launched by central or state governments are mentioned below.
- Rashtriya Gokul Mission
- National Kamdhenu Breeding Centre
- Special Package for Idukki District of Kerala
- Centrally Sponsored Scheme Livestock Health Disease Control During 2013-14
- Dairy Entrepreneurship Development Scheme
- Livestock Insurance Scheme
- Farmers Training Programme
- Fodder Development Scheme
- Kendriya Bhed Palak Bima Yojane
- Milk Incentives to Milk Producers
3. Can a person prepay the animal husbandry loan?
A. Yes, the loan taken for animal husbandry can be prepaid like any other loan provided such provision is available as per the4 guidelines of the lender. The borrower will have to pay a nominal penalty for such prepayment.
4. Is the loan moratorium facility applicable to animal husbandry loans?
A. Yes. Borrowers can avail of the facility of loan moratorium for a maximum period of 2 years (subject to lender’s guidelines) provided it is approved by the respective lenders.
5. Can animal husbandry loans be applied online?
A. Yes. Eligible applicants can apply for the animal husbandry loan online (by visiting the website of the lender) as well as offline (by visiting the nearest branch office of the lender) as per their convenience.
6. Does the applicant need to provide any security or collateral for an animal husbandry loan?
A. Yes, some lenders require the applicants to provide security or collateral for the animal husbandry loans. The primary security for these loans is the assets created out of the loan as well as the mortgage of land if required by the lender.
7. How can the animal husbandry loan be repaid?
A. The animal husbandry loans can be repaid through
- Post-dated cheques
- Standing instructions to the bank
- Automated payment through ECS
- Internet banking
- Mobile banking
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