Credit Guarantee Scheme for Livestock Sector Launched to Boost Rural Economy

In a significant move to strengthen the credit delivery system and promote the Livestock sector, the Department of Animal Husbandry & Dairying, Ministry of Fisheries, Animal Husbandry, and Dairying has initiated the implementation of the Credit Guarantee Scheme under the Animal Husbandry Infrastructure Development Fund (AHIDF). The scheme aims to facilitate the smooth flow of credit to Micro, Small & Medium Enterprises (MSMEs) engaged in the Livestock sector, without the burden of collateral security.

The Credit Guarantee Scheme has been designed to extend access to finance for un-served and under-served segments of the Livestock sector, specifically targeting first-generation entrepreneurs and underprivileged sections of society who often face hurdles in obtaining financial assistance due to the lack of collateral security for their ventures.

Under the scheme, the Department of Animal Husbandry & Dairying has established a Credit Guarantee Fund Trust worth Rs. 750.00 crores. This trust will provide credit guarantee coverage of up to 25% of the credit facilities extended by eligible lending institutions to the MSMEs in the Livestock sector.

The primary objective of the Credit Guarantee Scheme is to emphasize the viability of projects, securing credit facilities purely based on the primary security of the assets being financed. By focusing on project viability, the scheme aims to promote credit access to deserving MSMEs and boost entrepreneurship in the Livestock sector. The establishment of the credit guarantee fund trust was approved as part of the Prime Minister's AtmaNirbhar Bharat Abhiyan stimulus package of Rs. 15,000 crores, known as the "Animal Husbandry Infrastructure Development Fund" (AHIDF).

This fund incentivizes investments from individual entrepreneurs, private companies, MSMEs, Farmers Producers Organizations (FPOs), and Section 8 companies in various aspects of the Livestock sector, such as dairy processing and value addition infrastructure, meat processing and value addition infrastructure, animal feed plants, breed improvement technology, animal waste to wealth management, and veterinary vaccine and drugs manufacturing facilities.

The Credit Guarantee Fund Trust, which was formed in collaboration with NABSanrakshan Trustee Company Private Limited, a wholly-owned subsidiary of NABARD, marks the nation's first-ever fund trust under the Credit Guarantee Scheme of AHIDF in the agriculture and animal husbandry sector. This groundbreaking initiative is expected to significantly increase the number of MSMEs benefiting from the AHIDF scheme and enhance the ecosystem for collateral-free credit from banks. 

To ensure efficient management and execution, a credit guarantee portal has been developed as a rule-based B2B portal. The portal will facilitate the enrollment of eligible lending institutions under the Credit Guarantee Scheme, issuance/renewal of Credit Guarantee Cover, and settlement of claims.

Key Features of AHIDF Scheme:

1. Interest Subvention of 3%

2. Loan up to 90% of the total project cost from any Scheduled Bank, National Cooperative Development Corporation (NCDC).

To know more, check out: https://dahd.nic.in/ and https://ahidf.udyamimitra.in/