Loans can be classified based on time as short term (6-18 months), medium term (15 months-5 years), or long term (5-20 years). They can also be classified based on purpose. Common sources of farm loans include relatives, moneylenders, traders, cooperatives, and commercial banks. For a farm loan to be sanctioned, a farmer must submit an application providing details of their farm and finances, which the bank will verify by visiting the farm and checking records. If found eligible based on character, repayment ability, and other criteria, the loan will be sanctioned upon submission of documents and disbursed in phases, with follow up visits to ensure proper use.

1. Presented By :-
Avinash kumar
)

2.  Loans are certain
amount of money
provided for certain
purpose on certain
condition with some
interest ,which should
be repaid sooner or
later.

3. CLASSIFICATION OF LOAN
Based on time
a. Short term loan = 6 – 18
Months
Eg- crop loans

4. b.Medium term loan = 15 months – 5 years
Eg.- for purchasing implepents,el-motor,live
stock loan etc.

5. c. Long term loan = 5 – 20 years
Ex - construction of farm building,tractor
loan etc.

6. PURPOSE BASED LOANS

9. SOURCES OF FARM LOANS
 Relatives
 Agricultural moneylenders
 Professional moneylenders
 Traders
 Cooperatives & commercial Banks.…

10. COMMERCIAL BANKS

11. HOW A FARM LOAN IS SANCTIONED ?
Step – 1
Interview with the farmer
The banker studies the farmer –borrower in
the interview regarding his credit
characteristics like- honesty
- frankness
-progressive thinking
- repayment capacity etc

12. Step – 2
Submission of loan application by the farmer
Farmer filled up following details in the form:
- location of farm
- purpose of the loan
- farm budget
- financial statements etc…

14. Step – 3
Scrutiny of records
The ownership and extent of land as indicated in
the relevant certificates are verified by the bank
officials with village revenue officials.

15. Step - 4
Visit to farmers field before sanction of loan
- To verify the particulars given by the farmer.
- To verify the credit -worthiness .
- To verify the trust-worthiness.
- Take a look on technical feasibility etc..

16. Step-5
Criteria of loan eligibility
1.He should have sound character.
2. He should not be a defaulter in the past.
3.He must be progressive outlook.
4.He should ensure proper use of credit etc……

17. Step-6
Sanction of loan
After examining all the aspects like
-technical feasibility
-economic viability
-bankability of proposed projects
like-repayment capacity,risk –
bearing abilities etc.
* After satisfying all these the loan is sanctioned.

18. Step-7
Submission of requisite documents
Following documents are obtained by banking
institution :
* Demand promissory note
* Guarantee letter
* Mortgage deeds
* Installment letter etc…
Note: type of requisite documents vary with
bank to bank.

23. Step-8
Disbursement of loan
As soon as execution of documents is completed
,the loan amount is credited to the borrower
account.
Note :The loan amount is disbursed in phased
manner.

24. Step-9
Post credit follow -up
measures
A.O/B.M pays a visit to the
farmer to ascertain the proper
use of the credit;
Provide technical advise if
any.

27. ENDING STROKES :
Farm loans solve the finance problem of farmer
Farms activities are enhanced
Increase in farm production
More income generate
Farmers are happy
All peoples are happy
India is happy………