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What is NABARD Scheme?

NABARD stands for National Bank for Agriculture and Rural Development. This bank was established in 1982 to foster rural prosperity. NABARD has been authorised to provide credit and other financial facilities to promote and develop agriculture, cottage industries, small-scale industries, village industries, handicrafts, and more. 


The role of NABARD includes the funding of any agricultural activities with respect to rural development in India, as the institution's primary goal is the nationwide growth of India's rural community. There are three sectors around which schemes of NABARD work: development, supervision, and finance.

What are the Objectives of NABARD for Providing Long-Term Loans

The main objectives of NABARD scheme for providing long-term loans are:

  • Rendering capital investment support in agriculture, fishery, poultry, horticulture, etc. activities

  • Creating credit flow in the activities incorporated by NABARD and the government 

  • Identification and fulfilment of self -help groups (SHGs) and  joint -libality groups (JLGs) credit requirements

  • Promotion of non-agriculture employment opportunities by encouraging the semi-rural and rural people to explore and opt for alternate professions and job options

  • Extending support and assistance for mitigation and climate adaptation projects

  • Refinancing the credit linked with subsidy on capital investments by the Indian government under the authority of the NABARD subsidy

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Functions of NABARD

When it comes to NABARD functions, it plays a few distinct roles. They are as follows:

  • The NABARD scheme aims to provide funds for India’s rural infrastructure to enable long term irrigation practices.

  • Generally offering financial services and aid for the development and improvement of rural India.

  • Planning, implementing and managing any funding programs for farming and agricultural activities.

  • Providing all kinds of funding services for developing and growing food processing units and food parks in designated areas.

  • Offers both long term refinance and short-term refinance servicing to its customers. Simultaneously, it provides any direct refinance services to Indian cooperative banks.

  • Offering lending services, cold chain, and storage infrastructure to rural warehouses.

  • Marketing federations can receive credit facilities from the NABARD scheme.

  • Creating new policies for India’s rural financial institutions.

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Features of NABARD Scheme

The following are some of the features of the NABARD loan scheme.

  • Offering support for funding or refinancing.

  • Growing the infrastructure of rural communities in India.

  • Creating credit plans available at a district level for these communities.

  • Offering guidance and support to the banking sector so the latter can achieve their own credit targets for the year.

  • Carrying out the supervision of cooperative banks and Regional Rural Banks (RRBs) in India.

  • Devising new projects that aid in rural development of the country.

  • Putting into place any of the government’s developmental schemes aimed at helping the growth of rural areas.

  • Offering training services for handicraft artisans.

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Interest of NABARD Scheme

NABARD Scheme: Interest Rate on Refinance to Banks (per annum)

Here’s the list of rates of interest charged by NABARD on refinancing to banks and other NBFCs under different schemes:








Short Term refinance assistance

4.50% onwards:


  • State Cooperative Banks for financing crop loans

  • RRBs to finance crop loans

  • DCCBs directly financing for crop loans

  • Commercial Banks/RRBs in respect of their finance to PACS towards crop loans


5.50% for ST – Additional SAO/ST(Others)/ST (SAO) - SCARDBs (Annual Product)

8.10% for StCBs/RRBs – Conversion of Short Term – Crop loans into Medium Term loans

Long Term refinance assistance

8.50% onwards 

Regional Rural Banks (RRBs) and State Cooperative Banks (StCBs)

8.35% onwards

State Cooperative Agriculture and Rural Development Banks (SCARDBs)

8.35% onwards

Direct Lending

Bank Rate – 1.50%

Please note that the above-mentioned interest rates are subject to change at the discretion of NABARD and RBI. The stated rates do not include GST and service tax.

Types of NABARD Loans

The following loans are available under the NABARD scheme:

  • Short Term Loans

These are crop-oriented NABARD loans offered by various financial institutions to farmers to refinance crop production. This loan offers farmers and their surrounding rural communities the assurance of food security.

When Agro-operations are seasonal, as of FY17–18, the NABARD scheme has sanctioned ₹55,000 Crores to a host of financial institutions as the short-term credit loan amount.

  • Long Term Loans

These loans are offered by multiple financial institutions for either farm or non-farm activities. Their tenure is much longer than short term loans and ranges from 18 months to a maximum of 5 years. As of FY17–18, NABARD refinanced close to ₹65,240 Crores to financial institutions, covering any concessional refinancing of ₹15,000 Crores to Indian Regional Rural Banks (RRBs) and Cooperative Banks.

  • RIDF or ‘Rural Infrastructure Development Fund.’

RBI introduced the RIDF as part of the NABARD scheme as they noticed a shortfall in lending to priority sectors that need support for their rural development. With the main focus being rural infrastructure development, a total loan amount of ₹24,993 Crores was disbursed in FY17–18.

  • LTIF or ‘Long-Term Irrigation Fund.’

This was introduced as part of the NABARD loans to provide funding for a total of 99 irrigation projects with the disbursal of a loan amount of Rs. 20,000 Crores.

  • PMAY-G or ‘Pradhan Mantri Awaas Yojana - Gramin’

Under this financial scheme, NRIDA or the ‘National Rural Infrastructure Development Agency’ was given a loan amount of ₹9000 Crores to carry out its project of building pukka houses with all essential amenities to needy households 2022.

  • NIDA or ‘NABARD Infrastructure Development Assistance.’

NIDA is a sub-program under the NABARD scheme, and it specializes in providing credit to any financially well-to-do institutions or corporations that are state-owned. Hence, NABARD also refinances non-private schemes with the help of this program.

  • Warehouse Infrastructure Fund

Warehouse Infrastructure Fund provides scientific warehousing infrastructure for agricultural commodities. Initial loan of the amount Rs. 5000 was provided by NABARD in FY 2013–14. As of 31st March 2018, the amount disbursed is Rs. 4778 crores.

  • Food Processing Fund

Under the food processing fund of NABARD, the Indian government has a loan commitment of Rs. 541 Crores to be disbursed to 11 large-scale food park projects, 1 integrated food park project, and 3 rural food processing units in India.

  • Direct Lending

The NABARD scheme has specially sanctioned a loan amount of ₹4849 Crores for cooperative banks, which will assist four state-owned cooperative banks and 58 Co-operative Commercial Banks (CCBs) spread across the country.

  • CFF or ‘Credit Facility to Marketing Federations’

This category of NABARD loans promotes the marketing of farm activities by financially strengthening marketing federations. The amount disbursed to such federations as of 2018 was Rs. 25,436 Crores in total.

  • PACS or ‘Primary Agriculture Credit Societies’

NABARD has also launched a unique ‘Producer Organizations Development Fund’ or PODF for short. The goal is to provide financial support to PACS that mainly operate as ‘Multi Service’.

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NABARD Schemes for Farming Sector and Dairy Sector

In order to aid the farming sector, the NABARD loan scheme also offers specially developed schemes like the Dairy Entrepreneurship Development Scheme. This NABARD dairy loan aims to help potential entrepreneurs of the dairy market and enable them to enlarge their businesses by setting up dairy farms and boosting growth.

Main Objectives of NABARD for Farming Sector

The main objectives of NABARD for dairy farming are - 

  • Increasing the number of modern-day farms for milk production.

  • Technological upgrades increase the production of milk and promote it on a commercial scale.

  • Promoting self-employment and making infrastructural improvements.

  • Conserving breeding stock and encouraging heifer calf-rearing.

Other Farming Schemes Introduced under NABARD

  • Agri-clinic and Agribusiness Centers Scheme

  • National Livestock Mission

  • GSS – Ensuring End-Use of Subsidy

  • Interest Subvention Scheme

  • Credit-Linked Capital Subsidy Scheme (CLCSS) under NABARD

Capital Investment Subsidy Scheme for Commercial Production Units for Organic/Biological Inputs

The Credit-Linked Subsidy Scheme is yet another scheme launched in 2000 to facilitate the upgradation of small-scale industries (SSIs) units. These units must be included in the sub-sectors as defined under the scheme. NABARD has majorly contributed to promoting India's agricultural and rural development through consistent support. 


The support is extended through financial and non-financial systems, and the schemes are typically provided by rural cooperative banks and regional rural banks. Other business segments that can avail of these benefits include agricultural farmers, fish farmers, cattle farmers, and more.


Taking out a loan for your agribusiness can help you achieve your financial targets. You’re in luck because making a loan application was never easier. With the help of Business loans on Bajaj Markets, you can complete your entire application online from the comfort of your home.

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What are the Future Plan & Approaches for NABARD Scheme

The current plan and policies under the schemes of NABARD is quite extensive and aims to encourage people to opt for agricultural as well as non-agricultural employment opportunities making them self-sufficient. However, the government has to walk the extra mile to successfully implement the NABARD subsidy scheme in the country.


Recently, the Self-Reliant program or Atma Nirbhar scheme has been launched under the NABARD scheme that will render capital assistance to aspiring entrepreneurs of the rural area in the agriculture sector.

Frequently Asked Questions

Why was NABARD Scheme created?

The NABARD scheme was established in 1982 for the development of small-scale industries, cottage industries, and other urban or rural projects.

What are advantages of NABARD Scheme?

The advantages of the NABARD scheme are as follows:

  • It provides support for refinancing and funding.

  • It promotes the infrastructural growth of rural communities in India.

  • The scheme helps in creating credit plans at a district level.

  • Supervises the cooperative banks and Regional Rural Banks (RRBs) in India.

Which banks come under NABARD Scheme?

State Cooperative Banks (StCBs), State Cooperative Agriculture and Rural Development Banks (SCARDBs), Primary Agricultural Credit Societies (PACS), and District Central Cooperative Banks (DCCBs) comes under the NABARD Scheme.

Who can apply for NABARD Scheme?

Self-employed individuals as well as established business owners can opt for the loans under NABARD. Since there are many loans offered under this scheme, all of them has different eligibility criteria. So, it will be sensible if you consult with their respective organisation. 

What is the age limit for NABARD Scheme?

The age limit for taking a loan under NABARD scheme ranges between 21 years and 65 years.

How many types of funds are available in the NABARD scheme?

There are various types of funds available under the NABARD scheme:

  • Direct Lending

  • Warehouse Infrastructure Fund

  • Food Processing Fund

  • Long -term Loans

  • Long-term Irrigation Funds

  • Short-term Loans

  • Rural Infrastructure Development Fund

  • Primary Agriculture Credit Societies

  • Pradhan Mantri Awaas Yojana - Gramin

  • Credit Facility to Marketing Federations

  • NABARD Infrastructure Development Assistance

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