Credit Guarantee Scheme

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Overview:

The Department of Animal Husbandry & Dairying, Ministry of Fisheries, Animal Husbandry, and Dairying (DAHD) has introduced the ‘Credit Guarantee Scheme’ under the Animal Husbandry Infrastructure Development Fund (AHIDF) to support the Livestock sector's Micro, Small & Medium Enterprises (MSMEs).

About Credit Guarantee Scheme: 

 

  • It aims to strengthen the credit delivery system and ensure smooth access to finance for entrepreneurs engaged in the Livestock sector.
  • Objective:
    • The main objective is to encourage lenders to focus on the viability of projects and provide credit facilities based on the primary security of the assets being financed.
    • By providing access to financial assistance, it promotes investments in various areas of the livestock sector, such as dairy and meat processing, animal feed plants, breed improvement technology, waste management, and veterinary vaccine and drug manufacturing facilities.
  • Funding
    • The DAHD has set up a credit guarantee fund trust of Rs 750 crore, which will cover up to 25 per cent of credit facilities extended to eligible MSMEs by lending institutions.
    • The trust, formed in partnership with NAB Sanrakshan Trustee Company Private Ltd, a subsidiary of NABARD, ensures credit guarantee for MSMEs under the AHIDF scheme.
  • Key features include:
    • Interest subvention of three per cent
    • Loan of up to 90 per cent of the total project cost from any Scheduled Bank, National Cooperative Development Corporation (NCDC).
  • Who is eligible for the scheme? The scheme targets underserved sections of society, including first-generation entrepreneurs and underprivileged individuals, who often lack collateral security for their ventures.

 


Q1) What is NABARD?

NABARD stands for the National Bank for Agriculture and Rural Development. It is an apex development financial institution in India that was established on 12 July 1982 by the Government of India. NABARD's main objective is to provide financial and other support for the promotion and development of agriculture and rural sectors in the country.

Source: First ever “Credit Guarantee Scheme” for Livestock Sector launched for rebooting rural economy by leveraging MSMEs