Salient features of NABARD Support Scheme under PODF
The financial assistance to Producer Organizations is available in the project mode covering the capital cost, working capital requirements and as composite loan comprising both.
A Producer organization registered under any statute of law or any promoting agency engaged in the promotion and nurturing of PO.
Producers Organization registered under any statute of law, working for the benefit of the producer members with at least one year in existence and shares portion of its profit among the primary producer members. The Promoting agency is registered under relevant Act, has minimum 3 years audited balance sheets/ P&L account, not defaulted to any financial / donor agency and has not been blacklisted by any institution.
Mode of Finance
The Producer Organizations (POs) will be eligible for Term loan for investment activity, short term loan to meet working capital requirements or composite loan comprising of both working capital and block capital.
Quantum of Loan and Margin/ borrower contribution
NABARD's assistance (loan plus grant) shall not exceed 90% of the total project outlay. The borrower is required to contribute a minimum margin of 10% of the project outlay.
Rate of interest & Repayment period
The present interest rate ranges between 10.10% and 12.5% per annum. Loan repayment period rages from 3 to 7 years with a maximum of 2 years grace period. Penal interest @2% p.a. on delayed payment of principal and interest will be applicable.
Security for Loan
Hypothecation/ mortgage of assets created out of NABARD assistance (both loan and grant) and collateral security as prescribed by NABARD from time to time.
Financial Assistance for Short-term Working Capital requirements
Producer organizations need working capital for various purposes depending upon the nature of business. The most observed purposes are:
- Bulk procurement and supply of agriculture inputs, and/or
- Procurement of agriculture produce including seeds produced, processing and selling
Quantum of Short term Working Capital loan:
Working capital can be assessed and the limit would be fixed taking into account the raw material requirement, salaries, wages and operating costs, etc.
Minimum of 20% of the outlay need to be brought in as margin by the agency.
Maximum repayment period of short term loan for meeting WC needs shall not be more than 18 months.
Primary Security: Hypothecation/charge on the inventories both raw material and finished goods and assignment of book debts. Collateral Security: Collateral security to be taken as applicable for term loan to Producers Organization.
Rate of Interest
The minimum rate of interest would be 1% above the interest rate for term loan sanctioned to PO.