NABARD Loan for Producer Company

  • October 10, 2022
  • Registrationwala
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National Bank for Agricultural and rural development (NABARD) provides the financial assistance as required by the producer companies. A separate fund named “Producers Organization development fund (PODF) “has been created by NABARD for this purpose only. In this article, we will take a comprehensive look at the loan provided by NABARD for Producer Company in India.

Before looking at the various aspects of NABARD loan for Producer Company we will first understand the concept of Producer Company.  Producer Company is a business structure having any one of the objectives like production, harvesting, procurement, grading, pooling, handling, marketing, selling, and exports of the primary product of the members or import of goods or services for their benefit.

In order to support the producer companies financially, a fund named Organization development fund (PODF) was set up by NABARD in the year 2011 with the minimum corpus of 50 crores.  In order to be eligible for attaining Loan from NABARD, every producer company is required to fulfill certain eligibility criteria.

Eligibility Criteria

The eligibility criteria which every producer company is required to fulfill in order to obtain a loan from NABARD is as follows-

  1. The company is formed by a group of producers for either farm or off-farm activities.
  2. The company formed must be a registered body and a legal entity.
  3. The shareholders in the organization are producers.
  4. The organization deals with business activities related to the primary produce/product.
  5. It works for the benefit of the member producers.
  6. The profits earned by the organization are shared amongst the producers and the balance goes to the share capital or reserves.


In India, the majority of the farmers are very small and marginal with no sufficient access to the latest technologies.In order to provide the financial assistance to these farmers formed into producer companies or producer organizations this loan is provided. This helps the farmers to procure inputs at lower cost, adopt latest technologies, get access to finance, build linkages to market, develop post-harvest processing facilities and gain more selling power.


Any producer company can apply for the loan from the NABARD for several purposes. Broadly, it includes providing financial assistance, capacity building, market linkages etc. Some of the purposes for which loan can be obtained is as follow-

  • For the development of skills in both farm and off-farm sectors
  • Planning for business.
  • Providing classroom training for technological extension
  • Conducting exposure visits, agricultural university tie-ups, expert meetings, etc.
  • The benefit to the organization by taking any capacity building initiative.
  • Receiving loan for setting up of marketing infrastructure facilities for the sale of produce
  • Based on the need the support could even be on the lines of rural areas.
  • Tie-ups with buyers for the produce of Producers Organizations will be initiated by NABARD.
  • The partnerships between Producers Organizations and local and large companies will be promoted by NABARD.
  • The promotion of infrastructure will be promoted through existing schemes of MoRD and NHM.

How to apply for the loan from NABARD

In order to apply for the Loan, the Producers Organizations are required to submit concept note consisting of the details about the organization and the proposal. After carefully checking the concept note the NABARD HO/RO will approve the proposal. After approval, you have to submit the Detailed Project Report along with all the required statements. Also, you can submit the concept note online.

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