What We Do

Long Term Loans

Investment credit leads to capital formation through asset creation. It encourages technological upgradation resulting in increased production, enhanced productivity and incremental income to farmers and entrepreneurs. NABARD provides Long Term and Medium Term Refinance to banks for providing adequate credit to farmers and rural artisans etc. for their investment activities.

It is intended to create income-generating assets in the following sectors:

  • Agriculture and allied activities
  • Artisans, small scale industries, non-farm sector (Small and Micro Enterprises), handicrafts, handlooms, power looms, etc.
  • Activities of voluntary agencies and self-help groups working among the rural poor

I. Eligible Institutions

The Institutions Eligible for Refinance are:

  • State Co-operative Agriculture & Rural Development Banks (SCARDBs)
  • Regional Rural Banks (RRBs)
  • State Co-operative Banks (StCBs)
  • District Central Cooperative Banks (DCCBs)
  • Commercial Banks (CBs)
  • State Agricultural Development Finance Companies (ADFCs)
  • Scheduled Primary Urban Co-operative Banks (PUCBs)
  • North East Development Finance Corporation (NEDFC)
  • Non-Banking Financial Companies (NBFCs/NBFCs-MFIs)
  • Small Finance Banks


a. Farm Sector:

  • i. Land development
  • ii. Minor & micro irrigation, drip irrigation
  • iii. Water saving and water conservation devices
  • iv. Dairy
  • v. Poultry
  • vi. Beekeeping
  • vii. Sericulture
  • viii. Fisheries
  • ix. Animal husbandry
  • x. Loans to Self Help Groups / Joint Liability Groups / Rythu Mitra Groups
  • xi. Dry land farming
  • xii. Contract farming
  • xiii. Plantation & horticulture
  • xiv. Agro-forestry
  • xv. Seed production
  • xvi. Tissue culture plant production
  • xvii. Loans to corporate farmers, farmers' producer organizations/companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, up to an aggregate limit of ₹ 2 crore per borrower
  • xviii. Agriculture implements
  • xix. Production of high value/ exotic vegetables, cut flowers under controlled conditions i.e. poly house / green house,
  • xx. Establishment of hi-tech export oriented production like mushroom, tissue culture labs, precision farming for enhancement of productivity in vegetables and fruits

b. Non-Farm Sector:

  • i. MSME for both manufacturing and service, that creates employment in rural areas
  • ii. Agri-clinics and Agri-business centres
  • iii. Rural housing
  • iv. Agro-processing
  • v. Soil conservation and watershed development.
  • vi. Agri-marketing infrastructure (including cold storage, warehouse, godowns, market yards, silos etc.) irrespective of their location
  • vii. Non-conventional energy sources,
  • viii. Financing in areas of watershed & tribal development programmes already implemented.
  • ix. Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi-composting.
  • x. Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized Adivasi Multipurpose Societies (LAMPS) for on-lending to agriculture.
  • xi. Loans sanctioned by banks to MFIs for on-lending to agriculture sector
  • xii. KVI (Khadi Village Industries)
  • xiii. Rural Schools, health care facility, drinking water facility, sanitation facility and other Social infrastructure in Rural areas
  • xiv. Renewable energy like solar-based power generators, biomass-based power generators, wind mills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote village electrificat
  • ion
  • xv. Krishak Sathi Yojana
  • xvi. Area development schemes
  • Any other activities not mentioned above may also be covered if it facilitates the promotion of agriculture and rural development.

Loan Period

The loan period is up to a maximum of 15 years
Refinance Window

a. Automatic Refinance Facility (ARF):

Automatic Refinance Facility (ARF) enables banks to obtain financial accommodation from NABARD, without going through the detailed procedure of pre-sanction formalities. Banks are expected to appraise the proposals at their own level and finance the borrowers. Banks can then claim refinance from NABARD on the basis of a declaration (drawal application), indicating the various purposes for which refinance has been claimed and the loan amount disbursed. In such cases, the sanction and disbursement of refinance are attended to simultaneously by NABARD.

Automatic Refinance Facility is extended without any upper ceiling of quantum of refinance, bank loan or Total Financial Outlay for all kinds of projects under Farm Sector (FS) & Off-Farm Sector.

b. Pre-sanction Procedure:

If the banks intend to avail refinance under pre sanction procedure they are required to submit the projects for approval of NABARD. Before sanction of the same, NABARD appraises these projects to determine its technical feasibility, financial viability and bankability.

Extent of Refinance

The extent of refinance will be up to 90/ 95% of eligible bank loans depending upon the purpose, location of the investment and agency applying for refinance.

Criteria for Refinance

  • Technical Feasibility of the project
  • Financial viability and bankability
  • Organisational arrangements for credit supervision
  • CRAR norms for FIs
  • Net NPA norms for FIs
  • Net profit norms for FIs

Ultimate Borrowers

Although refinance is provided to SCARDBs / StCBs /DCCBs/ CBs / SFBs/ RRBs / ADFCs / PUCBs / NBFCs/ NBFC-mFIs the ultimate borrowers of investment finance may be individuals, proprietary/ partnership concerns, companies, state-owned corporations or co-operative societies, SHGs, JLGs, FPOs etc.

Formulation of special refinance schemes

To address the issue of rural migration and to give boost to the agriculture and rural sector in the post COVID era, NABARD introduced three special refinance schemes. In addition to this, NABARD introduced a special refinance scheme on Water, Sanitation and Hygiene to provide clean water, sanitation and good hygiene to protect human health during infectious disease outbreaks.

1. Special Long Term Refinance Scheme for PACS as MSC

The scheme intends to develop all the potential PACS as Multi Service Centres (MSCs) over a period of three years commencing from the FY 2020-21 by providing concessional refinance to StCBs at 3% to support PACS to create quality infrastructure (capital assets) and increase their business portfolio in tune with needs of the members.
Under this line of credit, NABARD has envisaged transformation of 35,000 PACS in three years commencing with the transformation of 5,000 PACS in FY21 and 15,000 PACS each during FY22 and FY23. ₹5,000 crore have been earmarked under this special dispensation for the year 2020-21. The ultimate interest rate to be charged from PACS will not be more than 1% over and above the interest rate charged by NABARD and will be shared by StCB & CCB as per the mutually agreed terms. Repayment period of refinance will be up to 7 years.

So far, 3,055 PACS were given in-principle sanction with estimated project cost of ₹1,760.82 crore and estimated bank loan of ₹1,568 crore by NABARD.

2. Special Long Term Refinance Scheme for beneficiaries of the watershed and wadi project areas

The objectives of the scheme are to promote sustainable economic activity, livelihood and employment opportunities for the beneficiaries in NABARD- supported watershed and wadi project areas by encouraging banks to lend these beneficiaries at concessional rates. This will facilitate in addressing the issue of rural migration and giving boost to the agriculture and rural sectors in the post COVID era.
The refinance will be available to all the eligible banks/FIs at 3% for a maximum period of 5 years. The ultimate lending rate to be charged by banks/FIs under the scheme is 6 months MCLR+1% or EBLR+2.5%, whichever is lower.

3. A Special Long Term Refinance Scheme for promoting Micro Food Processing Activities.

The objectives of the scheme are to encourage banks to lend micro-food processing activities and create sustainable livelihood and employment opportunities for rural youth as well as reverse migrants due to COVID-19 pandemic in the rural areas.

The scheme also envisages modernising and enhancing the competitiveness of the existing individual micro enterprises and ensuring their transition to formal sector in rural areas. The refinance scheme will give fillip to the recently launched “PM Scheme for Formalisation of Micro food processing Enterprises (PM FME)” under Aatmanirbhar Bharat Abhiyan by MoFPI, GoI under which about Rs.25,000 crore investment is expected in the sector. The concessional refinance at 4% is available to eligible financial institutions viz., commercial banks, SFBs, StCBs, RRBs and NABARD subsidiaries.

4. Schematic Refinance for Water, Sanitation and Hygiene (WASH)

The UN-framed Sustainable Developmental Goals aim to provide clean water and sanitation for all. This is imperative during the outbreak of a pandemic. Thus, NABARD decided to extend concessional refinance support to all eligible Banks/ FIs to enable them to deepen institutional credit to beneficiaries in WASH-related activities. Financing under the scheme will be at a concessional rate of interest for various categories of FIs.

New Developments during 2020-21

1. Pilot scheme for Partial Credit Guarantee scheme for NBFCs / NBFC-MFIs:

The scheme has been introduced to enable small NBFCs and NBFC -MFIs lending in agriculture, MSME, and microfinance sectors to raise funds from debt and capital market.

The partial credit guarantee could be extended by NABARD alone or along with one or more financial facilitation agency, whichwould also act as a co-guarantor and share the guarantee risk. The scheme will be undertaken as a pilot product with one pilot each with the existing market players to do two transactions of ₹100 crore each. This will help in generating higher credit flow at the ground level and developing smaller NBFC/ NBFC-MFIs into refinance clients of NABARD in future.

2. Engaging with NBFCs – Third party pool analysis:

Considering the market conditions and the demand for refinance from NBFCs, the appraisal process of the NBFC applications are strengthened. A third party pool analysis and monitoring the strength of the NBFC shall be in addition to the existing monitoring and appraisal mechanism. Reports from external agencies will provide inputs on various early warning signals about the NBFC and market intelligence with regard to the NBFC sector.

3. ST Refinance to SFBs:

To further accelerate the financial inclusion by facilitating credit availability to farmers for agriculture operations, working capital loans in MSE sectors, loans to retail trade, small businesses, professionals and other unorganized sector, at affordable rate of interest, SFBs were included as eligible institution to avail ST refinance. An amount of Rs49 crore has been extended to North East SFB during 2020-21.

What We Do