Starting or expanding a horticulture business in India requires capital for land acquisition, equipment, seeds, fertilizers, irrigation systems, and labor. Several loan options are available to help finance horticultural activities, with various schemes catering to farmers, agribusinesses, and entrepreneurs in this sector. Here are the best loan options for a horticulture business in India:
1. Agriculture Loan from Banks
Many public and private sector banks in India provide agriculture loans for horticulture and allied activities. These loans are designed to meet the financing needs of small and large-scale horticulture businesses.
- Loan Amount: Up to ₹50 lakh or more, depending on the scale of the project.
- Interest Rate: 7% to 12% (with government subsidies available in some cases).
- Tenure: 3 to 7 years (depending on the project and loan purpose).
- Collateral: May be required for larger amounts; small loans are often collateral-free under various government schemes.
- Eligibility: The business must be involved in horticulture, and applicants must be farmers, agribusiness owners, or entrepreneurs.
Popular Banks Offering Agriculture Loans:
- State Bank of India (SBI): Offers crop loans and term loans for horticulture under its “Agri Loan” scheme.
- Punjab National Bank (PNB): Provides agriculture loans for purchasing inputs, equipment, and land improvement for horticultural businesses.
- HDFC Bank: Offers flexible agriculture loans, including loans for expanding horticulture activities.
2. NABARD Loans for Horticulture
The National Bank for Agriculture and Rural Development (NABARD) provides refinance support to banks and financial institutions that offer loans for horticulture. NABARD’s focus is on promoting sustainable development in agriculture and horticulture through various schemes.
- Loan Amount: Based on the project, NABARD supports banks offering up to ₹1 crore or more for horticulture projects.
- Interest Rate: NABARD offers support at concessional rates, typically around 3-4% lower than standard bank loans.
- Eligibility: Entrepreneurs, agribusiness owners, and farmers engaged in horticulture activities.
NABARD Schemes:
- Rural Infrastructure Development Fund (RIDF): Supports the development of horticulture infrastructure like cold storage, processing units, and irrigation.
- Subsidy Schemes for Horticulture: NABARD offers subsidies for certain horticulture projects, especially those related to infrastructure development.
3. Kisan Credit Card (KCC)
The Kisan Credit Card (KCC) scheme is an initiative by the Indian government to provide short-term credit to farmers, including those involved in horticulture. This card allows easy access to credit for purchasing seeds, fertilizers, pesticides, and other inputs.
- Loan Amount: ₹50,000 to ₹3 lakh.
- Interest Rate: 4% to 7% (with government interest subsidies).
- Tenure: 1 to 5 years (revolving credit).
- Collateral: Collateral-free loans up to ₹1.6 lakh.
- Eligibility: Farmers and agribusiness owners involved in horticulture and related activities.
Benefits:
- Low-interest rates and flexible repayment schedules.
- Government interest subsidies on timely repayment.
4. Agricultural Infrastructure Development Loans
Horticulture businesses often require infrastructure such as cold storage, greenhouses, and irrigation systems. Several banks offer loans specifically for agricultural infrastructure development.
- Loan Amount: ₹5 lakh to ₹5 crore (depending on the scale of the project).
- Interest Rate: 8% to 12%.
- Tenure: 5 to 10 years.
- Collateral: Land, property, or the project itself may be used as collateral.
- Eligibility: Horticulture businesses looking to develop infrastructure for storage, processing, or irrigation systems.
Popular Banks Offering Agricultural Infrastructure Loans:
- ICICI Bank: Provides loans for setting up irrigation systems, cold storage, and processing units for horticulture.
- Axis Bank: Offers infrastructure loans for agricultural projects, including those related to horticulture.
5. National Horticulture Board (NHB) Subsidy Schemes
The National Horticulture Board (NHB) under the Ministry of Agriculture and Farmers’ Welfare provides financial assistance and subsidies to horticulture businesses. These schemes help in establishing horticulture projects and improving productivity.
- Loan Amount: Up to 50% of the project cost, with a maximum limit depending on the scheme.
- Subsidy: 35% to 50% of the project cost, depending on the region and project type.
- Eligibility: Farmers, agribusiness entrepreneurs, and horticulture businesses.
NHB Schemes:
- Integrated Development of Horticulture: Provides financial assistance for horticulture activities, including plantations, seed production, and infrastructure development.
- Cold Storage and Post-Harvest Infrastructure Scheme: Offers subsidies for building cold storage and related facilities for horticulture products.
6. MSME Loans for Agribusiness
Horticulture businesses can also avail loans under the Micro, Small, and Medium Enterprises (MSME) category. Many banks offer loans to agribusinesses, including horticulture, at attractive interest rates and with flexible repayment terms.
- Loan Amount: ₹1 lakh to ₹5 crore (depending on the business size and loan type).
- Interest Rate: 7.65% to 13%.
- Tenure: 1 to 7 years.
- Eligibility: Businesses registered under the MSME category involved in horticulture or agriculture.
Popular MSME Loan Providers:
- HDFC Bank: Provides MSME loans for agriculture-related activities, including horticulture.
- Bajaj Finserv: Offers quick MSME loans for small and medium horticulture businesses.
7. Mudra Loans (Pradhan Mantri Mudra Yojana)
Under the Pradhan Mantri Mudra Yojana (PMMY), small horticulture businesses can apply for Mudra Loans to meet their financing needs. This loan scheme is aimed at supporting micro and small enterprises in various sectors, including agriculture and horticulture.
- Loan Categories: Shishu (up to ₹50,000), Kishore (₹50,000 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh).
- Interest Rate: 8.4% onwards (varies by lender).
- Tenure: 1 to 5 years.
- Eligibility: Horticulture businesses that fall under the micro or small enterprise category.
Benefits:
- No collateral required.
- Flexible loan amounts based on business needs.
8. Loan Against Property (LAP)
If you own property, you can take a loan against property (LAP) to fund your horticulture business. This loan is a secured loan where your property is used as collateral, allowing you to borrow larger sums.
- Loan Amount: ₹10 lakh to ₹5 crore (depending on the property’s value).
- Interest Rate: 8% to 10%.
- Tenure: Up to 15 years.
- Eligibility: Property ownership and proof of a viable horticulture business.
9. Personal Loan
If you need quick funding for smaller horticulture operations or short-term expenses, you can consider a personal loan. Personal loans are unsecured and can be used for any business-related purpose, including buying equipment, seeds, or fertilizers.
- Loan Amount: ₹1 lakh to ₹25 lakh.
- Interest Rate: 10% to 24%.
- Tenure: 1 to 5 years.
- Eligibility: Based on income, credit score, and financial stability.
Conclusion:
When selecting a loan for your horticulture business, it’s important to evaluate the scale of your operation, the specific financial needs (land, equipment, working capital, etc.), and your repayment capacity. Government-backed schemes like KCC, NABARD loans, and subsidies from the National Horticulture Board offer attractive benefits, while traditional bank loans and MSME loans provide flexibility and access to larger amounts for business expansion.