Under the CGTMSE initiative, banks and financial institutions will be authorised to offer loans worth Rs. 1 lakh crore with a 3% annual interest subsidy and credit guarantee coverage for loans worth up to Rs. 2 crores. This is the Agriculture Infrastructure Fund page (AIF).

Objectives of Agriculture Infrastructure Fund

The main purpose of the Agriculture Infrastructure Fund (AIF) is to provide financial support to agricultural entrepreneurs in order to improve the country’s agricultural infrastructure.

Beneficiaries Agriculture Infrastructure Fund (AIF)

Among those who will benefit from the Agriculture Infrastructure Fund (AIF) scheme are:

• Farmers
• A self-help group (SHG) is a group of people who come together to help each other.
• Agri-entrepreneurs
• Startups
• Primary Agricultural Credit Society is a non-profit organisation that provides loans to farmers (PACS)
• Cooperative Societies Marketing
• Farmer Producer Organizations (FPO Joint Liability Groups) are a type of farmer producer organisation (JLG)
• Cooperative Societies with Multiple Purposes
• Public-Private Partnership Projects funded by a central/state agency or a local body

Benefits of Agriculture Infrastructure Fund

This financing facility will benefit all players in the agricultural ecosystem in a variety of ways, including:

Benefits to Farmers FPOs, PACS & Marketing Cooperative Societies

• As a result of the AIF, farmers’ overall revenue will grow.
• As a result of enhanced marketing infrastructure, farmers will be able to sell directly to a larger base of customers, boosting their value realisation.
• As a result of the AIF, farmers will be more self-sufficient and have improved market access.
• Farmers can control when they sell and maximise their profit margins by using modern packaging and cold storage methods.

Benefits to Agri entrepreneurs and startups

• With a dedicated source of capital, entrepreneurs will aim for agricultural innovation by utilising new-age technologies such as IoT (internet of things), AI (artificial intelligence), and others.
• The AIF will expand prospects for collaboration between businesses and farmers.

Duration of the scheme

From the current fiscal year until the fiscal year 2029, the Agriculture Infrastructure Fund scheme will be in force (10 years).

Financial Assistance under Agriculture Infrastructure Fund (AIF)

Under the CGTMSE proposal, banks and financial institutions would provide loans worth Rs. 1 lakh crore with a 3% annual interest subsidy and credit guarantee coverage for loans up to Rs. 2 crores.

Interest Subvention Cost

• A 3% annual interest subsidy would be applied to all AIF loans up to a ceiling of Rs. 2 crores.
• This subsidy will be available for no more than seven years. For loans in excess of Rs. 2 crores, interest subvention would be limited to Rs. 2 crores.
• The loans would be released over four years, with a sanction of Rs. 10,000 crore this fiscal year and Rs. 30,000 crore in each of the three following fiscal years.
• The quantity and proportion of money supplied to private firms as a percentage of the overall financing facility may be determined by the National Monitoring Committee.

Credit Guarantee Cost

• Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) plan, the Agriculture Infrastructure Fund (AIF) will offer credit guarantee coverage for qualified borrowers for loans up to Rs. 2 crores. The government will pay the AIF coverage charge.

The moratorium on Repayment

The repayment moratorium under this AIF might range from six months to two years.

Eligible Project

The plan will make it easier to set up and modernise essential components of the following projects:

• Projects for Post-Harvest Management
• Projects that are feasible for enhancing community farming assets.

S.No	Post Harvest Management Projects	Viable projects for building community farming assets
1	Supply chain services including e-marketing platforms	Organic inputs production
2	Warehouses	Biostimulant production units
3	Silos	Infrastructure for smart and precision agriculture.
4	Pack houses	Projects for establishing supply chain infrastructure for crop clusters, particularly export clusters, have been identified.
5	Assaying units	Projects for community farming assets or post-harvest management are promoted by the federal, state, or local governments or their agencies as part of a public-private partnership.
6	Sorting  and grading units
7	Cold chains
8	Logistics facilities
9	Primary processing centres
10	Ripening Chambers

Criteria for selection of Eligible Borrowers

In partnership with the National Bank for Agriculture and Rural Development and monitoring committees, lending institutions must create the following criteria for selecting qualified borrowers:

Following the signing of a Memorandum of Understanding (MoU) with NABARD, all scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), and the National Cooperative Development Corporation (NCDC) will provide this financing facility.

AIF specific focus

As part of this initiative, the government will place a specific emphasis on SC/ST enterprises and female entrepreneurs. SC/ST entrepreneurs will get a quarter of the total grant-in-aid available under the plan (16 per cent for SC and 8 per cent for ST). Furthermore, lending institutions will guarantee that women and other marginalised groups are fully covered. It must be assured that the benefits of the system are universal and reach the intended beneficiaries.

Management of AIF

The Agri Infra Fund will be managed and monitored using an online Management Information System (MIS) platform. Using this website, all qualifying entities can apply for loans from the fund. The platform will provide benefits such as interest rate transparency across banks, scheme features such as interest subvention and credit guarantee, less paperwork, a speedier approval process, and integration with other programme benefits.

Application Procedure for Agriculture Infrastructure Fund (AIF)

Qualifying businesses must apply for funding using the Management Information System (MIS) platform.

Banks and lending institutions will get interest subsidies and credit guarantee support from the Public Financial Management System. To make payments to beneficiaries under this strategy, lending institutions must utilise an Aadhaar-linked bank account.