FINANCING FOR DRAUGHT ANIMALS AND CARTS

Objective:
To meet the genuine credit needs of farmers for purchasing draught animals and/or carts so tht they can carry out their farm operations in time as also increase their income from hire charges of the animals/cart when they are not in use on their farms.

Purpose:

For purchasing draught farm animals like bullocks, he-buffaloes, camels, horses mules etc and
For purchasing animal drawn carts

Eligibility:-

a) Farmers having owned/registered leased land may be provided credit for purchasing two animals as per requirement.
b) A farmer can also be financed for one animal provided he/she is already owning an animal or in cases where the farmer is already owning an animal or in cases where the farmer cannot afford more than one animal.
c) Farmers/landless labourers may be financed for a pair of animals and cart where there is enough scope for hiring the cart.

Technical Feasibility:-

The following factors should be considered while evaluating technical feasibility
a) Suitability of the animal/cart
b) Availability of animal/cart
c) Arrangement for fodder and feed
d) Potential for sufficient work for the animals/cart
e) Housing of animals, etc.

Financial Viability:-

The cost of the animals and cart proposed to be purchased should be reasonable and as per unit cost fixed by NABARD. Financial Availability should be assessed considering income from own farm and hire charges of animals and cart. The incremental income should be enough to repay the loan within 4 to 5 years.

Quantum of Finance/Margin:-

For small and marginal farmers, agricultural labourers;
Full amount of the unit cost and margin should not be insisted upon
For others 75 to 85 % of unit cost can be financed.

Type of Facility/Term:-

Term Loan – Annual Review

Security :-

1. D.P. note (L-434)
2. composite Hypothecation agreement (CHA 1/CHA-2)
3. L-515
4. Annex the clauses on non-diversion of funds and securitisation enclosed to Br. Cir.No.97/186 dated 08.03.2004 with CH I/CHA-II/CHA-IV
5. Equitable or Legal Mortgage or Deed of Declaration of Land or collateral security as appropriate where the limit exceeds Rs. 50000 (Legal Mortgage in form CHA-4
6. Letter of guarantee for guarantor/s where ever considered necessary (CHA-3)
7. Insurance of Live stock

Disbursement:
a) The limit for a cart should be disbursed direct to the manufacture/vendor. Proper receipt to be obtained and kept on record.
b) The limit for purchase of animals should also be disbursed directly to the seller of the animals.

REPAYMENT:- Half yearly/Annual installments depending upon the cropping pattern and income from the cart. The loan should be repaid within a period of 4 to 5 years