Professional Documents
Culture Documents
It deals with
produce/product
Portions of profit are shared amongst the producers and the balance
goes to the share capital or reserves.
business
activities
related
to
the
primary
Principle
The guiding principles for the operation of PODF are broadly as indicated
below:
o a. Producers Organization registered under any Statute of Law are
eligible.
o
The activities may fall within the domain of agriculture, allied sectors
& Non Farm Sector only.
6.
The fund will be used for providing loan to carry out the economic
activity and mix of grant and loan for capacity building market
linkages.
The Producers Organization will act for the benefit of the producers.
Eligible
The following interventions will be undertaken out of the fund:
Activities
A. Financial
Producers Organization would be eligible for the following types of loans:
B. Capacity Building
Capacity building should broadly cover any activity relating to
functioning of a producer organization. Broadly the various types of
capacity building initiatives which can be supported under the fund are
as follows:
up of marketing
Support could even be in the lines of rural haat and rural mart if
the situation so desires or it could be structured differently based
on the need.
for
Producers
Producers
tie
ups
with
buyers
The overall grant inclusive of all components would not exceed 20% of
the loan amount.
D. Other
Areas
Other than the three broad categories stated above, support would be
available for
Support for preparation of DPR up to 0.5% of the project cost or 1
lakh whichever is lower. This support will be given subject to the
fact that the project is sanctioned by NABARD. The grant amount
would be within the overall cap of 20% stated above.
7. Eligible
Institutions
The following institutions will be eligible for assistance from PODF:
I.
II.
to
Registered
Producers
iii
7. Selection Criteria
a.
Producers
Organization
:
ROs may ensure that the Producers Organization is registered and is
working for the benefit of the producer members. In case, the Producers
Organization is in existence for more than one year, the Audited Balance
Sheets/ P&L Account with audited notes for completed financial year
(Max. 3 years) of the Producers Organization has to be analysed while
assessing the performance of the organization.
b.
NGOs/
CBOs:
ROs may ensure that they are registered under relevant Acts, have
Project Duration:
Generally Projects having duration of around 7 years would be considered
under the Fund. Projects can have a moratorium up to 1-2 years under the
Fund. However, in exceptional cases, subject to genuineness of the
requirement, and due to unavoidable exigencies which may arise during the
implementation of the project, the duration may be extended up to a
maximum of 10 years inclusive of moratorium based on cash flow and
viability of the project.
9. Eligible items of Expenditures
Items eligible for assistance broadly include cost of building, machinery,
equipments, specially designed vehicles for transportation etc. and/or
working capital requirements including administrative and other recurring
costs connected with the project as composite loan. Capital expenditures like
purchase of land, vehicles for general transportation & personal use, etc.,
will not be considered for support under the Fund. However, support for
hiring premises, etc., wherever necessary, may be considered on a selective
basis.
10.
Quantum of Assistance
Mode of Assistance
The Fund will be utilised to extend support in the form of loan for taking up
the economic activity along with grant or loan or a blend of both, as may be
decided by NABARD on the merits of each case for capacity building and
marketing. It can be used for grant assistance alone for development of PO if
felt necessary.
12.
The rate of interest for the loan will be decided by ALCO from time to time.
Actual rate would be based on risk analysis using risk tool and collaterals
provided.
13.
Security
Repayment Period
Submission of proposals
18.
i.
After the project is found feasible and viable for lending, until internal
risk management skills are developed, external appraisal will be done
by external experts which could be institutions (CRISIL, CARE, IL&FS,
SBI Capital, etc.) or individuals (Specialists) or Risk Officer appointed
by NABARD.
j.
After getting these reports, RO team will prepare the draft sanction
memorandum for sanction from the competent authority and forward
the same to HO.
Release of Assistance
20.
Utilisation of Assistance :
Eligible Activities
Establishment of agro-storage centre, agro-processing centre, agri-information
centre, agri-transportation & marketing facilities, consumer stores and other
support activities. PACS functioning as PO for on-lending to select members for
farm/off-farm/ service sector activities besides crop loan (ST-SAO), are also eligible.
Eligible Institutions
NABARD assistance is available either directly to PACS or through State/ District
Central Co-operative banks.
Eligibility Criteria
for the last three years with no accumulated losses. The PACS should be under
category A or B of audit classification.
District Central Co-operative Bank (DCCB) Bank in category A, B or C
audit classification, are eligible to avail financial assistance for on-lending to PACS.
State Co-operative Bank (StCB) - Financial support will be made available
as per the eligibility criteria of General Refinance Agreement.
Mode of Finance
The financial support is available to PACS under project mode which includes,
credit support - term loan and composite loan; need based Grant assistance for
accompanying measures.
Project Cost
A minimum 10% of the project cost is considered as borrowers contribution.
Rate of Interest
The present rate of interest charged by NABARD to PACS on its loan is minimum
10% p.a. Penal interest of 2% p.a. will be charged on the delayed payment of
principal and interest. Repayment will be maximum 9 years including grace period
of 2 years.
Security
Primary security
Collateral Security: PACS - 100% of loan amount as collateral for category A &B
and 125% for category C PACS. For CCB - Collateral security to the extent of
100% of loan amount is taken from CCB in category A or B and 125% for C
audit classification. SCB - The security requirements will be governed by the
eligibility criteria under General Refinance Agreement.
Progress so far
The cumulative sanctions of financial assistance to the Producer organizations
amounted to Rs. 368.52 crore and disbursements to the tune of Rs.176.058 crore
as on 31 March 2015, benefiting a total of 156 POs in the country. Similarly, 2211
PACS have been assisted under NABARD scheme with cumulative sanctions of
financial assistance to the tune of Rs. 596.095 crore and Rs. 314.086 crore has
been disbursed up to the same period.
2015 All Right Reserved, NABARD.
The aim is to see PACS as outreach of successful banking system, says Nabard official
Rural banking is all set to get a major boost with Nabard in association with APCOB
launching a pilot scheme to transform Primary Agricultural Cooperative Societies (PACS)
into Multi Service Centres (MSC).
Keeping in view that only 50 per cent of one lakh-odd PACS in the country are active,
Nabard wants to release funds to APCOB to enable District Central Cooperative Banks to
assist and guide the PACS sanction various types of loans widening their base from
granting only crop loans.
After helping them in project evaluation and finalising the project reports, the PACS
concerned has to make its own assessment for sanction of loan to individual entrepreneurs
be it a Mee Seva Centre, godown, cold storage, one-stop shop for buying agriculture inputs,
crop cutting machine or supply of tractors on rent.
The Nabard initiative is driven by the fact that the commercial banks have about 35,000
branches and Regional Rural Banks about 15,000 branches in the rural areas. Farmers need
much more. As PACS have good network and membership, we want to encourage them even
to get accreditation for registration with commodities exchange, indulge in trading based on
prevailing price of various items, effective market intervention, NABARD Chief General
Manager K. Ramachandran Nair told THE HINDU on Monday.
Our intention is to see PACS as outreach of successful banking system to achieve financial
inclusion, he said. The PACS will get funds for which they have to fix the rate of interest to
be charged from the beneficiaries. NABARD will collect an 11 per cent interest from them.
Mr. Nair said they would also encourage PACS to fund for add-on services to make them
viable. Of 2,768 PACS, they are targeting to sanction loans to 700 in Andhra Pradesh in the
first phase so as to make them frontrunners. Rs.116 crore has been sanctioned for 187 PACS
in the first phase, of which Rs.20 crore has already been released.
NABARD, on its part will motivate them for capacity building, finance and accompanying
measure such as by giving them grant for building backup infrastructure like computers and
online connectivity.
APCOB, on its part will have a Project Monitoring Unit and DCCBs at the district level will
have PACS Development Units.