State Dept of Agricultural Marketing Urges Banks to Speed Up Funds Disbursement for Centre's AIF Scheme

Officials from the department pointed out at a recent meeting of the State Level Bankers' Committee (SLBC) in Tamil Nadu that while banks had sanctioned 548 crore under the programme, disbursements were just 331 crore.

The AIF is a financing institution established by the Centre on July 8, 2020, for the development of post-harvest infrastructure and community agricultural assets. The scheme provides a 3% annual interest subsidy up to a cap of 2 crore, which is available for a maximum of seven years.

If the loan exceeds 2 crore, the interest subsidy will be capped to 2 crore. The Credit Guarantee Fund Trust for Micro and Small Businesses (CGTMSE) scheme provides credit guarantee coverage for qualifying borrowers for loans up to 2 crore.

Officials from the Agricultural Marketing Department further stated that the interest rate levied by banks under the scheme is more than 9%, causing a bottleneck, and that collateral is required for loans up to 2 crore.

SLBC stated that interest rates are determined by each bank's specific policy and recommended banks to strictly adhere to the regulations outlined in the scheme regarding collateral security.

The scheme's principal goal is to provide financial assistance to agricultural entrepreneurs in order to build agriculture infrastructure in India. Improved marketing infrastructure allows farmers to sell directly to a greater base of consumers, increasing value realization.