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Crop Loan

Crop loan is a short term advance which is given by banks and co-operative societies who deals in financial sector. This loan is available for purchasing of inputs such as improved seeds, fertilizers. Every state provides crop loan because it is priority sector advance. It is repaid in single installment after the production of crops. It is fully secured loan. Crop loan's interest should be debited on half yearly at simple interest. All banks who are providing crop loan and agricultural finance can be refinanced by NABARD.

Crop Loan in India

In India, crop loan is demanded by small farmers and govt. of India also helps them loan at cheap rates. On February 26, 2010, The government announced loans at a subsidised interest rate of five per cent – two per cent less than market rate -- for farmers who pay their dues in time.

Announcing this in his Budget speech for 2010-11, Finance Minister Pranab Mukherjee also said that the credit target for the agriculture sector has been increased to Rs 3,75,000 crore for the next fiscal from Rs 3,25,000 crore 2009-10.link

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Accounting Education: Crop Loan
Crop Loan
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