Dairy Farm Loan in India: Check Eligibility & How to Apply Online

Eligibility Criteria for Dairy Farm Loan

The eligibility criteria for a dairy farm loan are designed to be simple and inclusive so that more dairy entrepreneurs can access timely credit. The following individuals and entities are eligible to apply:

• Individual farmers and dairy entrepreneurs
• Partnership firms and proprietorship businesses involved in dairy farming
• Private Limited and Limited Liability Partnership (LLP) companies
• Self-Help Groups (SHGs) and NGOs engaged in dairy activities
• Milk Unions, Cooperative Societies, and Milk Federations
• Groups from the organised and unorganised dairy farming sector

Additional conditions for Cooperative Societies applying for a dairy farm loan:

• Must have received a Grade ‘A’ in the last audit
• Should supply a minimum of 1,000 litres of milk per day on average to the affiliated milk union
• Should have earned pre-tax profits in the two financial years preceding the loan application

General eligibility requirements for a dairy farm loan:

• Business must have been in operation for at least 3 months
• Minimum turnover of ₹90,000 in the preceding 3 months
• Business location should not appear on the negative or blacklisted list
• Applicant should be at least 21 years of age

Documents Required for Dairy Farm Loan

Applying for a dairy farm loan requires minimal documentation. Below is a comprehensive list of documents required:

All documents can be uploaded digitally with no physical visits required.

How to Apply for a Dairy Farm Loan Online

Applying for a dairy farm loan online is fast, paperless, and fully transparent. The entire process can be completed in under 10 minutes. Here is how:

• Visit the lender’s website and navigate to the dairy farm loan page
• Fill in the online application form with your business details, loan amount required, and contact information
• Upload the required documents digitally with no physical paperwork or branch visits needed
• Receive an instant loan evaluation where advanced AI and data analytics are used to assess your application within 72 hours
• Upon approval, the dairy loan amount is disbursed directly to your bank account within 3 working days

Government Schemes for Dairy Farm Loan

The Indian government and NABARD have introduced several schemes to support the dairy farm business sector. Availing a dairy farm loan under these schemes can significantly reduce your financial burden through subsidies and concessional rates:

Dairy Entrepreneurship Development Scheme (DEDS)

• Offers a capital subsidy of 25% of the project cost for General category applicants
• Subsidy of 33.33% for SC/ST category applicants
• Minimum 10% of the project cost to be contributed by the applicant
• Eligible activities include setting up modern dairy farms, clean milk production, heifer calf rearing, and milk processing units

NABARD Dairy Development Programme

• Supports the establishment and modernisation of dairy units across rural India
• Interest rates are governed by RBI guidelines, with repayment tenure typically ranging from 3 to 7 years

Pradhan Mantri Mudra Yojana (PMMY)

• SHISHU: Loans up to ₹50,000 without collateral
• KISHORE: Loans from ₹50,001 to ₹5 lakh
• TARUN: Loans from ₹5 lakh to ₹10 lakh
• Available to farmers, NGOs, and organised or unorganised dairy groups

Kisan Credit Card (KCC) Scheme

• Extended to dairy farmers to cover working capital needs such as fodder purchase, veterinary charges, and milk transportation
• Provides revolving credit at concessional interest rates

Features and Benefits of Dairy Farm Loan

A dairy farm loan comes with a host of features that make it uniquely suited for the needs of the Indian dairy industry:

• Collateral-Free Financing: Get a dairy farm loan without pledging any personal or business assets as security.
• Zero Processing Charges: No application fee or hidden costs at any stage of the loan process.
• No Foreclosure Penalty: Repay the dairy loan early without any additional charges.
• Fast Approval and Disbursal: Loan decisions within 72 hours and disbursal within 3 working days.
• Covers Modern Infrastructure: Finance milk houses, BMC units, milk vans, and automated milk dispensing systems under the same dairy farm loan.
• Flexible Repayment Options: Choose between monthly EMIs or bi-weekly payments based on your cash flow.
• Revolving Credit Access: Bi-weekly repayment accelerates loan closure, enabling faster access to renewed credit.
• Pan-India Availability: Accessible even from smaller towns and rural areas through fully digital lending platforms.
• Improves Credit Score: All loan transactions are reported to credit bureaus, helping borrowers build a stronger credit profile over time.

Loan Amount, Tenure & Repayment Options

A dairy farm loan is designed to be highly flexible across loan amount, tenure, and repayment structure. Below is an overview:

Repayment Modes Available:

• EMI (Equated Monthly Instalments): The dairy farm loan is repaid in equal monthly instalments, making it easy to plan and budget cash flows for your dairy farm business.
• Bi-Weekly Instalments: Repay every two weeks, which effectively doubles the speed of repayment and opens up the revolving credit facility faster.
• Foreclosure: Pay the entire outstanding dairy loan at any point after the first EMI, with zero foreclosure charges.

Payments are processed electronically via NACH (National Automated Clearing House), a hassle-free auto-debit mechanism.

NABARD Subsidy for Dairy Farming

The National Bank for Agriculture and Rural Development (NABARD) plays a central role in making dairy farm loans accessible to rural India. Through its refinancing and subsidy mechanisms, NABARD ensures that dairy entrepreneurs, especially small farmers, can access credit at affordable rates.

Key NABARD Subsidy Features:

• Capital subsidy of 25% for general category applicants under DEDS, capped at an eligible project cost
• Capital subsidy of 33.33% for SC/ST farmers, making the dairy farm loan even more affordable
• The farmer must contribute a minimum of 10% of the total project cost
• Subsidy is back-ended and credited to the loan account after partial repayment
• The project must be implemented within 9 months of sanction; failing which, the sanctioned subsidy lapses
• Eligible financial institutions include Commercial Banks, Regional Rural Banks (RRBs), State Cooperative Banks, and any institution approved by NABARD

Eligible Activities Under NABARD Dairy Subsidy:

• Setting up modern dairy farms for clean milk production
• Heifer calf rearing to conserve and develop good breeding stock
• Procurement of milking machines, bulk coolers, and related equipment
• Establishing milk chilling infrastructure at the village level
• Milk product processing units to add value at the farm level

It is advisable to check your eligibility under NABARD-linked schemes before applying for a dairy farm loan to maximise your subsidy benefit and reduce your effective borrowing cost.