Attempts to raise agricultural productivity in farms across India has been a tiresome task. It has left this population vulnerable with low incomes and high operational costs. Despite accounting for 49% of the Indian workforce, the Economic Survey of 2017-18 stated that the agricultural sector earned only 16% of the total GDP. This makes it very important for farmers to know and understand available loan options available to cover these high costs.
Image Source: BusinessToday.In
Since 1998, starting with the Kisan Credit Card scheme, the Indian government and banks pushed credit flows to meet the growing financial needs of the agricultural sector. But aside from the available credit provisions, farmers can consider getting a personal loan to cover their costs. They are also easier to apply for and get approved than agricultural loans.
Provided farmers understand their capacity to meet the loan repayments, personal loans are highly flexible in terms of amounts, EMIs, tenures, and eligibility requirements. Without collateral requirements applications, these funds can help farmers meet daily expenses or invest in affordable technology to improve productivity.
Personal loans are so accessible because of the range of loan amounts to borrow. Minimum amounts can go as low as Rs. 1000 and the maximum goes up to Rs. 25 lakhs. All this is available while getting to enjoy flexible and lower monthly repayments. The Bajaj Finserv personal loans on Finserv MARKETS come with a maximum amount of Rs. 25 lakhs so farmers can enjoy instalment and interest payments at a 45% reduction. Their disbursal is lightning fast – within 24 hours. Repayment periods are also flexible with tenures ranging from 12 months to 60 months. Farmers can choose a tenure period that goes with high income seasons. Thus, farmers can invest in lucrative agricultural commodities and technological innovations.
According to the United Nations Development Programme, 40% of food produced in India is wasted. India faces a huge hunger problem with 20 crores of people going hungry each day. A bigger issue is that 16% of agricultural produce, mainly fruits and vegetables, are thrown out. Currently, only 10% of perishable agricultural produce get access to cold storage facilities, which are mostly used for potatoes to meet India’s fried chips demand. Currently, the country needs additional storage facilities for 370 million metric tonnes of perishable goods.
Storage is a major issue for farmers who cannot house their produce for more than 2 weeks. They cannot afford to cover electricity costs, invest in decent infrastructure, and access funding to build storage facilities. Farmers are also unaware of the access they have to loans and other credit provisions to meet their needs. With no specific code on how to use their loans, farmers can spend on seeds and meet other daily expenses. They can consider getting a higher sum to invest in technologies. This will help them construct their own storage facilities to keep produce fresh for periods of high prices.
Image Source: IIM Kolkata
With flexible repayment plans, personal loans can also be used to purchase technological innovations to improve agricultural productivity. There is a vast range of technologies, designed by agribusiness startups, being developed and are sold at low prices to prevent food wastage. For example, the low-cost solar dryer, at lifetime investment of Rs. 14,200, avoids food wastage by allowing farmers to dehydrate their produce and conserve them for a minimum of six months while also preserving nutrients, taste, and color. The UN believes these innovations will raise farmers’ incomes by reducing food waste in India.
A pilot study by the Bill & Melinda Gates Foundation stated that food losses can be reduced by 60% if low-cost micro-storage facilities are implemented. These innovations allow farmers to enter new markets such as dried products and to gain returns to repay their personal loans. Farmers can also leverage and adapt to market rates to increase their incomes by saving produce during low-price periods and selling when price rates are higher. Cold chain infrastructure can also improve transportation of agricultural goods by increasing shelf life and usability of the commodities in their best form. This helps improve availability while boosting farmers’ incomes and employments to higher levels during lean seasons. International and domestic companies are seeing the growth potential of agricultural businesses. They are developing technologies to supply chains and agricultural equipment that support farmers to boost productivity at lower costs and higher efficiency.
Image Source: Economic Times India
Loan procurement processes are relatively seamless and hassle-free for those seeking personal loans. Without collateral requirements, farmers get to protect their property. On Finserv MARKETS, you can avail collateral-free personal loans with no hidden costs through transparent terms and conditions. Repayments can also be a breeze if farmers invest their loans into technologies and lucrative activities. The government supports farmers by increasing minimum support prices for agricultural produce such as wheat, paddy, and coarse cereals. These prices are placed at 50% over the cost, which covers production costs and interest repayments without any distress.
Source: Times of India
There is a big potential for growth in the agricultural sector with financial support from the government, banks and NBFCs along with technological innovations from agri-businesses. Farmers can reduce food waste, store produce for better economic periods, and improve supply chain links. They can also enjoy growth in agricultural productivity, cost-reduction, and income boosts with personal loans in different amounts and flexible payment plans such as the Hybrid Flexi Personal Loan on Finserv MARKETS. Provided they learn and enjoy access to personal loans, we can expect high positive growth for farmers nationwide.
You can also read about impact of GST on Personal Loan.
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