S.y b.b.a roll no 9 & 7


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S.y b.b.a roll no 9 & 7

  1. 1. NGES BBA COLLAGE PATAN Sub:-Banking & insurance Topic:- Agriculture loan Submitted to:- submitted by Nisarg sir S.y b.b.a
  2. 2. INDEX 1. definition 2. types 3. advantages 4. scams in Dena bank
  3. 3. Definition Agricultural Loans are made to farmers to finance farming activities. Agricultural loans make up about 1% of all bank loans but are an important form of lending for small rural banks. Smaller banks used about 6% of their assets to make agricultural loans. Short-term agricultural loans are usually seasonal and are used to finance the purchase of seeds, fertilizer and livestock. These types of loans usually require a lending officer to inspect the borrowers farm once a year.
  4. 4. Types of Agriculture loan Agriculture loans are commonly supplied by the Farm Service Agency (FSA) of the United States Department of Agriculture (USDA). You may be able to find state or local loans as well, but the federal programs are often the most well-funded and easy to secure. Consider these programs if you are looking for an agriculture loan. Farm Storage Facilities Loans Farm Storage Facility Loans (FSFL) can help you afford the cost to build an on-farm storage facility for your crop and products. To qualify, the commodities you are storing must fall into the categories of: corn, oats, wheat, barley, rice, soybeans, peanuts, oilseeds, lentils, peas,
  5. 5. hay, biomass, fruits, vegetables or grain. If you qualify, you can obtain up to $500,000 in direct financing from the federal government. Farm Operating Loans Operating loans assist farmers in day-to-day needs or expansion requirements. They come in both direct and indirect options. An indirect loan is provided by a private lender but may be guaranteed by the FSA. This makes the loan more affordable. A guaranteed, indirect loan may be issued in an amount as large as $1,112,000, with a guarantee up to 95 percent. Direct loans may also be issued to credit worthy individuals who do not qualify for private loans due to other circumstances. These loans may be as large as $300,000. Farm Ownership Loans Like operating loans, ownership loans provided by the FSA come in both guaranteed and direct loan form. The limits are the same as those limits provided by the operating loan program. This money must go directly toward the purchase of land, livestock, crops or machinery needed to assist in acquiring ownership of a farm meant for commercial production. In addition to credit requirements, the farm owner must have experience in the farming industry to promise successful operation of the new business. Fisheries Finance Program This program is designed for specific projects in fisheries that qualify under the direction of Congress. A qualified program is eligible for up to 80 percent financing through a direct loan program. This loan program is designed to refinance a private debt on a fishing vessel or to provide for maintenance and repairs on an existing vessel. Qualified projects do not include complete construction of a new fishing vessel or fishery, however. In order to qualify, the fishery must meet environmental and government regulations. The business owner must also be free of delinquent federal debt and be in good financial standing. This program is not designed to refinance a loan in delinquency or default.
  6. 6. Farm Labor Housing This program provides loans and grants through the US Department of Housing and Rural Development's Rural Housing initiative. The program provides capital to build or replace housing structures for rural farm workers. The program is meant to make the housing facilities more livable, and it may include the replacement or repair of furnishings inside the housing structure. Further, this loan or grant can extend to a wide range of farming projects including rare projects like oyster farming or fisheries. The Advantages of Agriculture Loans 1. USDA o The United States Department of Agriculture sponsors most of the farm loans made in America. These loans are not always direct loans from
  7. 7. the federal government. Instead the government approves certain lenders to make farm loans using government-approved standards and regulations. A list of approved lenders can be found on the USDA webpage (see resources). Direct Loans o The USDA makes operating loans and farm ownership loans on a direct basis. These loans are used to make land purchases, operating equipment purchases, as well as livestock, machinery, and tool purchases. The advantage of these loans is that new ranchers can finance expansion on their farms. Similarly, struggling farmers can apply for an OL (operating loan) to subsidize low revenues due to a poor farming season. Emergency Loans o Ranchers and farmers are often the victims of natural disasters. These USDA emergency loans help disaster victims renovate and rebuild property lost, or replace damaged machinery. In order to qualify for an emergency loan, farmers must live in an area designated as a Federal Disaster Zone by the President or the Secretary of Agriculture. These loans have often helped farmers rebuild and recover instead of losing their businesses entirely. SDA Loans o Socially disadvantaged loans (SDA) are made to ranchers and farmers who've historically faced discrimination or prejudice due to ethnicity, gender, race, sexual orientation, or national origin. Such loans are made to African-Americans, Asian-Americans, Pacific Islanders, women, American Indians, Native Alaskans, and Hispanics. These loans are intended to offer advantages to marginalized individuals and communities. First-time Farm Owners o The FSA and USDA also offer funding to first-time ranchers and farmers. In order to qualify for these loans, borrowers must not have owned an operating farm in the last 10 years. Also, these loans are made
  8. 8. to borrowers who show evidence of solid creditworthiness. These loans are intended to foster the creation of new farms in the United States. Sometimes considered an antiquated business, farmers and ranchers contribute hugely to the U.S. economy, and the federal government's loan programs are intended to aid and foster these individual business owners. • Dena bank loan scams • Dena Kisan Gold Credit Card Scheme • Dena Kisan Credit Card Scheme • Financing Agriclinic/Agribusiness Centres • Scheme for Financing construction/ renovation/ expansion of Cold Storage • Scheme for Financing Rural Godown • Dena Bhumiheen Kisan Credit Card Scheme • Scheme for financing Tenant Farmers / oral Lessees • Scheme for extending credit to purchase of Land by small and marginal farmers • Financing Horticulture Crops • Dena General Credit Card Scheme • Loan for development of waste land