A majority of Agricultural loans operate within 18 months of repayment period which commonly known as Seasonal Agricultural Operations (SAO). Farmers seeking loans facilitating "long term loans" with repayment period of upto 15 years may give immense opportunities to invest in diversified fields like Dairy Farm, Farm Mechanisation, Minor Irrigation, Lift Irrigation, Horticulture, Land Developments, Sheep / Goat / Piggery / Poultry Farm, Inland fisheries, Sericulture, Rural Godowns, Farm Plantations / Forestry Plantations and other activities. Agricultural Term Loans (ATL) fulfil the whole requirement through various banking institutions under strict regulation of RBI / NABARD.
What is Agricultural Term Loans (ATL)?
Agricultural Term Loans (ATL) means, a term loan that farmers get extended repayment period of upto 15 years as an investment credit to specific agricultural activities. This long term financial assistance to farmers make sense getting return from their investment over the period without overburden. Agricultural Term Loans (ATL) aims to rejuvenate poor Indian Farmers who always becomes prey of local money lenders. RBI and NABARD regulate agricultural loans and providing refinance to banking institutions (commercial, rural, cooperative etc.) on reasonable terms. It helps to deregulate rate of interest and increased flow of credit to the agriculture sector.
How Agricultural Term Loan Works Through Banks?
The indicative unit cost for various activities is fixed by the State level Banker’s Committee (SLBC) in consultation with NABARD. At the time of actual financing the bank may fix the cost less or more than such indicative unit cost based on actual field level conditions justifying the variation.
SBI Agricultural Term Loan
Banks gives agricultural term loans in the form of direct finance to cultivators to create assets facilitating crop production / income generation. Repayments span not less than 3 years and not exceeding 15 years. Activities broadly covered are land development, minor irrigation, farm mechanization, plantation and horticulture, dairying, poultry, sericulture, dry land, waste land development schemes, etc.
Eligibility for SBI Agricultural Term Loan
All categories of farmers-small / medium-and agricultural labourers are eligible for agricultural term loans, provided they have necessary experience in the activity and the required land area.
Margin Money for Agricultural Term Loan
- Upto Rs.10,000: No margin.
- Above Rs.10,000: 15% to 25%
Collateral Security For Agricultural Term Loan
- Amount of Loan where movable assets are created
- Upto Rs. 25,000: Hypothecation of assets
- Above Rs. 25,000: Mortgage of land (or) third party guarantee
- Amount of Loan where movable assets are not created (eg.: Dug-wells, development of land etc.)
- Upto Rs.10,000: DPN / Loan agreement, Hypothecation of Asset
- Above Rs.10,000: DPN / Loan agreement, Mortgage of land or third party guarantee.