NABARD Loan For Your Food Business – Eligibility, Terms and Conditions

By | May 11, 2017
NABARD is India’s apex development financial institution, formed by an Act of Parliament in 1982. Beginning as a pure refinance provider in its early years, it has today grown into India’s largest DevelopmentFinancial Institution working for rural India with its footprints in a host of areas like development of rural infrastructure, deepening of financial inclusion, women empowerment,capital formation &climate proofing of agriculture, besides strengthening of rural financial institutions among many others.
This post will be around the topic Nabard Loan for food processing industry.
Nabard Loan
In the 2015 Budget, Our honourable, Finance Minister had announced the setting up of a Rs.2000 crore fund in NABARD for providing loans to Entrepreneurs setting up food processing businesses in food parks. The operations guidelines for the same has recently been announced by the NABARD.

Industries Eligible Under the Scheme

NABARD loan for food processing is available for a wide range of postharvest activities resulting in value addition or enhanced storage life to the food product. The following food processing activities such as cleaning, grading, waxing, controlled ripening, labelling, packing and packaging, warehousing, canning, freezing, freeze drying and more are eligible under the scheme. The products of processing/manufacturing undertaken by the units may include:

  • Fruits, vegetables, mushrooms, plantation crops and other horticulture crops.
  • Milk and milk products.
  • Poultry and meat.
  • Fish and other aquatic & marine products.
  • Cereals, pulses, oilseeds and oil crops.
  • Herbs, medicinal and aromatic plants, forest produce, etc.
  • Consumer food products, such as bakery items, confectionery, snacks, etc.
  • Any other category of ready-to-eat food/ on the gofoods.
  • Packaged drinking water, soft drinks, beverages, carbonated drinks, non-alcoholic drinks, energy drinks,  etc.
  • Food flavours, food colours, spices, condiments, ingredients, preservatives and any other item which may be required in food processing.
  •  Health drinks, health foods, nutraceuticals etc.
  • Any other activity entertained by the authority for the establishment in the designated Food Park.

If You Are Looking Out For Idea For Your Food Startup, Have A Look At,

Entities Eligible for Loan Under the Scheme

This NABARD loan for food processing units under this scheme will be given only for units in designated food parks. Food processing units in the following designated food parks are eligible under this scheme:

  • Mega Food Parks promoted by Ministry of Food Processing Industries ( MOFPI), Government of India.
  • Food Parks/ exclusive food processing industrial estates promoted by State Governments.
  • Food Parks promoted by Ministry of Food Processing Industries ( MOFPI), Government of India.
  • Designated food processing/ agro-processing/ multi products SEZs, including de-notified areas of these SEZs.
  • Any other area having developed enabling infrastructure and designated as Food Park by Ministry of Food Processing Industries (MOFPI), Government of India.

The following types of entities in the above-designated food parks are eligible for NABARD loan:

  • Federations of Cooperatives,
  • Farmers’ Producer Companies
  • Limited Companies
  • Entities promoted by Government of India,
  • Joint ventures, SPVs, Cooperatives
  • State Governments Entities
  • Private Limited Company
  • Individual Entrepreneurs (Proprietorships)

Term Loan Provided by NABARD under NABARD LOAN SCHEME

Under the NABARD Food Processing Fund, term loan will be provided by NABARD either directly or in consortium with other lenders. The term loan will be provided by NABARD at concessional rate of interest for the following:

  • Development/Establishment of all infrastructure required in the designated Food Parks.
  • Setting up of individual food processing units or any other unit that is established for supporting the operations of the food processing units within the designated Food Parks.
  • Modernization of existing processing units in the designated Food Parks resulting in upgradation of technology, reduction in cost, automation, increased efficiency, improvement in product quality, etc.

For undertaking the above activities, NABARD provides term loan of upto 75% of project cost for corporates, companies, SPVs, joint ventures and individual entrepreneurs. The term loan can be extended with a tenure of upto 7 years at NABARD’s Prime Lending Rate (PLR) + Risk Premium. NABARD’s present Prime Lending Rate (PLR) is 9.00%. A risk premium of upto 1% will be added on top of the NABARD PLR based on borrower’s credit profile.

References :

4 thoughts on “NABARD Loan For Your Food Business – Eligibility, Terms and Conditions

  1. Sonja Nyhan

    I like your post and your blog is very nice and simple. I will promote it to my facebook group. I think most of my member group will like your site. thanks

  2. Ramesh Chandra Thakur

    I want start mini falawar mill for 5 kg and 10kg aata poli pack plant please help .

Leave a Reply