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Long Term Loans
Investment credit leads to capital formation through asset creation. It induces technological upgradation resulting in increased production, productivity and incremental income to farmers and entrepreneurs. NABARD provides Long Term and Medium Term Refinance to banks for providing adequate credit for taking up investment activities by farmers and rural artisans etc. 
 
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, powerlooms, 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
 
II. Purposes:
 
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 nonconventional energy based public utilities viz. street lighting systems, and remote village electrification
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. 
 
III. Loan Period:
 
 
The loan period is up to a maximum of 15 years
 
IV. 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 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.
 
V.   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.
 
VI. 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
 
VII. 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.