NABARD Subsidy Awareness for Bankers & Agri-Entrepreneurs

If you’re planning to start any agriculture-based business or you’re already in the banking sector handling agri-loan projects, you must have heard of NABARD – the National Bank for Agriculture and Rural Development.

But have you ever wondered how NABARD subsidies work, and why it is crucial for both entrepreneurs and bankers to understand these provisions thoroughly?

Why NABARD Subsidy Knowledge is Essential ?

NABARD doesn’t directly provide loans to entrepreneurs. Instead, it acts as a refinancing agency, working through banks to implement credit-linked subsidy schemes. These schemes are designed specifically for agriculture-based businesses. Therefore, taking a bank loan is mandatory to avail of NABARD’s subsidies.

So, if you’re:

A business owner in the agriculture sector,
A banker in public or private sector banks,
A credit officer managing agri-projects,
Or a direct selling agent (DSA) involved in loan facilitation,

Types of NABARD-Linked Subsidies ?

1. Credit Linked Subsidy Scheme

These subsidies require the borrower to take a loan from an eligible bank. Once approved, a portion of the project cost is reimbursed by NABARD in the form of capital subsidy.

2. Agriculture Infrastructure Fund (AIF)

Implemented by the Ministry of Agriculture and Farmers’ Welfare, AIF provides interest subvention of up to 3% per annum on bank loans taken for agriculture infrastructure projects, for a period of up to 7 years.

In addition to the interest subsidy, if your project falls under MSME and you pay CGTMSE cover fees (for collateral-free loans), that cover fee is also reimbursed, making it more affordable for the borrower.

3. Capital Subsidy for Storage and Processing Units

NABARD offers capital subsidies up to:

₹1 crore for storage warehouses, and
₹50 lakh to ₹75 lakh (depending on zone) for processing units like oil mills, fruit processing, etc.

Why Bankers Should Understand NABARD Provisions ?

As a banker, your role is critical in:

Evaluating project finance proposals,
Understanding eligibility norms like promoter’s margin,
Advising clients on maximum eligible loan limits,
Ensuring proper documentation for subsidy claims.

Your clients rely on your guidance not only for loans but also for understanding how to minimize their cost using subsidy benefits. The better your knowledge, the better your service, and the more competitive your loan offerings become.

Benefits for Business Owners :

If you’re starting a storage project, food/agri-processing unit, or any rural/agriculture-based enterprise, NABARD subsidies can:

Reduce your initial investment burden,
Lower your interest cost,
Help in building credit-worthy projects with a strong financial foundation.

Knowing whether your project falls under AIF, NABARD subsidy, or both, allows you to prepare project reports smartly, get prior approvals, and maximize benefits.

NABARD Subsidy Combo E-Books – A Must-Have Resource

To help both bankers and business owners, we’ve created 3 NABARD subsidy-specific eBooks:

Subsidy for Storage/Warehouse Projects
NABARD Subsidy for Agri-Based Projects (Non-storage)
Agriculture Infrastructure Fund (AIF)

These eBooks explain:

Eligibility norms
Financial structuring
Term loan and promoter contribution
How to claim subsidies via banks
Real examples and best practices

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Call Us : 8683898080

E-mail Us : sales@kipfinancial.com

KIP Financial Consultancy Pvt. Ltd.

DSB – 38, Red Square Market, Hisar – 125001 (HR)