Now Reading: UP cabinet approves Rs 6 lakh loan at 6% interest for farmers
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UP cabinet approves Rs 6 lakh loan at 6% interest for farmers
The Uttar Pradesh cabinet has approved a proposal to provide long-term loans of up to Rs 6 lakh to small and marginal farmers at a concessional annual interest rate of 6% under…
The Uttar Pradesh cabinet has approved a proposal to provide long-term loans of up to Rs 6 lakh to small and marginal farmers at a concessional annual interest rate of 6% under the Mukhyamantri Krishak Samriddhi Yojana. The loans will be disbursed through the Uttar Pradesh Cooperative Gram Vikas Bank Ltd.
The scheme aims to improve access to affordable institutional credit for farmers who often face difficulties in meeting agricultural investment and other rural financial needs. Loans will be available for a long tenure to support agricultural and other rural requirements.
The government expects the scheme to provide financial assistance at a relatively lower cost and strengthen farmers' capacity to invest in agriculture and allied rural activities. The loans are now available for eligible farmers to apply through the designated cooperative bank.
Indian Opinion Analysis
The scheme targets the 85% of UP's farmers who are small and marginal, owning less than 2 hectares. A 6% rate is roughly half the typical agricultural term loan from commercial banks, which the RBI sets at MCLR-plus, currently around 11-13%. The key test will be how many farmers actually access the credit through the cooperative bank network, which has historically suffered from low outreach and high NPAs. The state government will need to monitor disbursement timelines and repayment defaults to gauge whether the subsidy achieves its goal of boosting farm investment without straining the cooperative bank's balance sheet.
Source: timesofindia.indiatimes.com
This brief was synthesised by AI from the source linked above.
