What is the Agriculture Infrastructure Fund (AIF) Scheme?

About Agriculture Infrastructure Fund (AIF) Scheme:

• It is a Central Sector Schemewhich was launched in 2020.
• Objective: The scheme shall provide a medium- to long-term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.
• The duration of the Scheme shall be from FY2020 to FY2032 (10 years).
• Who is eligible?
  • Primary Agricultural Credit Societies (PACS)
  • Marketing Cooperative Societies
  • Farmer Producers Organizations (FPOs)
  • Farmers
  • Self Help Group (SHG)
  • Joint Liability Groups (JLG)
  • Multipurpose Cooperative Societies
  • Agri-entrepreneurs and Startups
  • Central/State agency or Local Body sponsored Public-Private Partnership Projects.
• Exclusions: Public Sector Undertakings (PSUs) are not directly eligible under the scheme, but projects sponsored by them under PPP are eligible.
• All scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), and National Cooperative Development Corporation (NCDC) may participate to provide this financing facility.
• If required, need-based refinance support will be made available by NABARD to all eligible lending entities, including cooperative banks and RRBs, as per its policy.
• Features:
  • All loans up to a limit of ₹ 2 crores under this financing facility will have interest subvention of 3% per annum. This subvention will be available for a maximum period of 7 years.
  • An applicant can put up to 25 projects in different locations, and each of such projects will be eligible under the scheme for a loan upto ₹ 2 crore.
  • This limit of 25 projects is applicable to private sector entities, such as farmers, Agri entrepreneurs, and start-ups.
  • This limitation of 25 projects will not be applicable to state agencies, cooperatives, national and state federations of cooperatives, FPOs, federations of FPOs, SHGs, and federations of SHGs.
  • Multiple projects in one location are also eligible with an overall cap of ₹2 crore.
  • Under the scheme, it is mandatory for borrowers to contribute at least 10% of total project cost, irrespective of available capital subsidy.
  • The moratorium for repayment under this financing facility may vary, subject to a minimum of 6 months and a maximum of 2 years.
  • 24% of total grants–in–aid under the scheme should be utilized for SC/ST entrepreneurs (16% for SC and 8% for ST).
  • Besides this, lending institutions would ensure adequate coverage of entrepreneurs belonging to women, and other weaker sections of society may be provided loans on a priority basis.
  • Credit guarantee coverage will be available for eligible borrowers from this financing facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crores. The fee for this coverage will be paid by the Government.
  • In the case of FPOs, the credit guarantee may be availed from the facility created under the FPO promotion scheme of the Department of Agriculture, Cooperation & Farmers Welfare (DACFW).