“ TITLE OF THE PROJECT ”

Submitted under requirements of Semester I

NAME OF STUDENT
BATCH

PRN

SYMBIOSIS INSTITUTE OF BUSINESS MANAGEMENT, NAGPUR

Under the Guidance of

Name and Designation of Internal Guide

1
 Date of Submission :
Format for Obtaining Internal Guide’s Consent

To be attached to the Project Report

I, , have been approached by Mr. / Ms.

, batch 2022-24, to be his / her guide for the
Research project that is to be submitted as part of his / her course requirements
for Semester I.

The company proposed to be studied by the student for the distribution of its
products is:

I hereby accord my consent to act is the guide for the student for the aforesaid
project.

( Signature of Guide )

Date :

2
 FORMAT FOR DECLARATION BY STUDENT REGARDING
PLAGIARISM

This Research Project titled“ ”

Towards the completion of my course requirements for Semester V is my
original
Work and has been carried out under the guidance of .

The material borrowed from other sources and incorporated in the

Report has been duly acknowledged and / or referenced.

I understand that I will be held liable and accountable for plagiarism,

if any, is detected later on and that my marks are liable to be
cancelled in such event.

Signature of Student

Date :

3
1.EXECUTIVE SUMMARY

1
As a part of our curriculum for the MBA (Food and Agri-Business Management), we
have to do live project in the second semester regarding Agri finance. As a part of the
project we have a choice of choosing any best organization to work with, also we have to
choose our guide who will assist in the project. Analyzing all the factors we were placed
in Nagpur district Cooperative bank, Nagpur

Mr. Who was the business head of agri finance department of central bank was assigned
to us to instruct about the ins and outs of the operations. As we have to choose the
working of the agri finance departmet.. DCCB is one of the most preferred bank of for
availing the agri finance this topic was interesting to study as the the process and what are
the documents they are required. It gives the great insights and ides of the banks function.
Apart from the we also got extra theoretical knowledge by the other executives of the
bank like we had a meeting with the director of the company.

As agri finance consists of various steps of, each and every process is explained in detail
and how each department is operated like how they are applying for the loan, how it is
selected and sent to the sanction. As it should be stored in the freezer, all the conditions
required to disbursement and other small process where it is available and how it should
be handled efficiently. It is run a s a under the government this coordination between the
state central bank is the most important aspect for running the company successfully.

2
2. INTRODUCTION

3
The role of infrastructure is critical for agricultural development and moving production
dynamics forward. Only via the development of infrastructure, particularly at the post-
harvest stage, will produce be optimally utilized, allowing for value addition and a fair
deal for farmers. The creation of such infrastructure must also handle the vagaries of
nature, regional inequities, human resource development, and realizing the full potential
of our finite land resource.

Climate change, population expansion and changing dietary habits, global pandemics,
and conflicts have all posed threats to food security and the development of the agri-food
sector. They put immense pressure on policymakers around the world to shift their focus
to the development of a more sustainable and resilient agri-food economy. According to
estimates, global food demand would rise by 70% by 2050, necessitating at least $80
billion in yearly investments across the value chain. Due to limited public resources and
the vast size of automation, climate smart technology, processing, and agri-food logistics,
the majority of this must come from the private sector.

Most developing countries' financial systems are unprepared to support the transition to
sustainable agriculture and agri-food enterprises. Historically, banks, microfinance
institutions, and institutional investors have provided very minimal resources to the
sectors. Farm loan and investment portfolios are currently disproportionately low in
comparison to the agriculture sector's GDP share. Managing unique risks in agriculture,
high transaction costs in dealing with a large number of small farmers and micro, small,
and medium enterprises (MSMEs) along the agriculture value chains, limited effective
demand for finance, and financial institutions' lack of expertise in managing agricultural
loan portfolios are all significant challenges for financial markets.

Agricultural finance is often defined as the examination, analysis, and exploration of the
financial components of the farm business, which is India's core sector. The financial
considerations include monetary value associated with disposal production and
agricultural goods. Agricultural finance is divided into two categories: micro finance and
macro finance. In India, agricultural loans are provided through the National Bank for

4
Agriculture and Rural Development. It is the only bank that provides substantial financial
assistance to farmers. Kisan Credit Card Scheme, Private Sector Bank Agricultural
Loans, Nationalized Bank Loans, and State Bank of India Loans are other types. Must be
well-versed in all of its varieties.
Agriculture financing is more important now than ever before. Some farmers use this
assistance specifically to meet their production needs and to purchase various types of
farming equipment. Furthermore, agricultural financing is required to address numerous
farmer demands such as agricultural marketing, post-harvest storage and transport of
food, power supply, the need for good quality seeds, fertilizer procurement, diseases, and
challenges such as poor rainfall, and so on. So these are the agricultural funding
requirements.

Agricultural Finance in India – A brief history:

Phase 1 (1951-69):
 Since the first FYP in 1951, there has been a focus on improving the primary
sector.
 In 1968, the National Credit Council underlined the importance of commercial
banks increasing their lending to small-scale industry and farmers.
 The nationalization of banks in 1969 accelerated the establishment of rural/semi-
urban bank branches.

Phase 2 (1970-1990)
 The 1970s saw the advent of commercial banks into agricultural financing
through the Lead Bank Scheme and the regulatory mandate of Priority Sector
Lending (PSL).
 The Regional Rural Bank Act of 1976 was created to provide banking and credit
facilities primarily for agricultural and other rural sectors.

5
  The National Bank for Agriculture and Rural Development (NABARD) was
founded in 1982 with the goal of promoting agricultural and rural development,
primarily through the funding of SHGs and MFIs.
 To expand outreach to rural areas, the RBI created the service area approach
(SAA) and the Annual Credit Plan (ACP) system in 1989.

Phase 3 (1991-onwards)

 Implementation of the Narasimham Committee Report of 1991 to improve bank

operational efficiency.
 In 1990, the first big nationwide farm debt waiver was issued.
 The Rural Infrastructure Development Fund (RIDF) was established in
collaboration with NABARD, with the primary goal of subsidizing rural
infrastructure projects.
 In 1992, NABARD launched a pilot project SHG-Bank Linkage Programme in
rural areas.

Farmers can obtain loans for a variety of agricultural activities. These tasks include
storage, production expansion, product marketing, finance, day-to-day operations,
purchasing land, and purchasing farming equipment or machinery such as tractors and
harvesters. In India, there are far too many different sorts of agricultural loans. If you
want to learn more about them, check out the points listed below.

 Crop Loan is the earliest sort of agricultural finance. Crop loans are available to
any farmer through the National Bank for Agriculture and Rural Development
and other commercial sector institutions.
 In addition, the Kisan Credit Card is a sort of farm loan in India. It was introduced
for the first time in India by Indian banks in 1998. Any farmer can borrow funds
at a rate of 7% per year for amounts up to Rs. 3 lakh.
 Other types of agricultural loans in India include combine harvester loans,
multipurpose gold loans, drip irrigation loans, tractor loans, poultry loans, and
dairy loans.

6
 One of the top institutions for farmer loans is the National Bank for Agriculture
and Rural Development. The NABARD is the only and most wonderful bank that
gives financial assistance to farmers. Agriculture loans include the Kisan Credit
Card Scheme, Nationalized Bank Loans, Private Sector Bank Agricultural Loans,
and State Bank of India Loans.

7
3. BASIC CONTENTS OF THE REPORT

8
1. Introduction:
About the bank
Establishment & Functioning

In accordance with the provisions of the Cooperative Act, the Nagpur District Central
Cooperative Bank Ltd, Nagpur (NDCCB) began operating as a bank on April 4, 1911.
The only Central Financing Agency (C.F.A.) for the Nagpur district of the Vidarbha
region of the then-central province of the Indian peninsula was established in 1911 by the
Nagpur District Central Cooperative Bank Ltd. It becomes the Central Financing Agency
for the farmers and agriculturalists of Nagpur district in the Maharashtra State after the
incorporation of the distinct Vidarbha area in the Maharashtra State.

In accordance with the terms of the Cooperative Act, the Nagpur District Central
Cooperative Bank Ltd, Nagpur (NDCCB) began operating as a bank on April 4, 1911.
The single Central Financing Agency is the Nagpur District Central Cooperative Bank
Ltd established for velfare of farmers/agriculturist of Nagpur district in the Maharashtra
State.

The role of infrastructure is critical for agricultural development and moving production
dynamics forward. Only via the development of infrastructure, particularly at the post-
harvest stage, will produce be optimally utilized, allowing for value addition and a fair
deal for farmers. The creation of such infrastructure must also handle the vagaries of
nature, regional inequities, human resource development, and realizing the full potential
of our finite land resource.

Climate change, population expansion and changing dietary habits, global pandemics,
and conflicts have all posed threats to food security and the development of the agri-food

9
sector. They put immense pressure on policymakers around the world to shift their focus
to the development of a more sustainable and resilient agri-food economy. According to
estimates, global food demand would rise by 70% by 2050, necessitating at least $80
billion in yearly investments across the value chain. Due to limited public resources and
the vast size of automation, climate smart technology, processing, and agri-food logistics,
the majority of this must come from the private sector.

Most developing countries' financial systems are unprepared to support the transition to
sustainable agriculture and agri-food enterprises. Historically, banks, microfinance
institutions, and institutional investors have provided very minimal resources to the
sectors. Farm loan and investment portfolios are currently disproportionately low in
comparison to the agriculture sector's GDP share. Managing unique risks in agriculture,
high transaction costs in dealing with a large number of small farmers and micro, small,
and medium enterprises (MSMEs) along the agriculture value chains, limited effective
demand for finance, and financial institutions' lack of expertise in managing agricultural
loan portfolios are all significant challenges for financial markets.

Agricultural finance is often defined as the examination, analysis, and exploration of the
financial components of the farm business, which is India's core sector. The financial
considerations include monetary value associated with disposal production and
agricultural goods. Agricultural finance is divided into two categories: micro finance and
macro finance. In India, agricultural loans are provided through the National Bank for
Agriculture and Rural Development. It is the only bank that provides substantial financial
assistance to farmers. Kisan Credit Card Scheme, Private Sector Bank Agricultural
Loans, Nationalized Bank Loans, and State Bank of India Loans are other types. Must be
well-versed in all of its varieties.
Agriculture financing is more important now than ever before. Some farmers use this
assistance specifically to meet their production needs and to purchase various types of
farming equipment. Furthermore, agricultural financing is required to address numerous
farmer demands such as agricultural marketing, post-harvest storage and transport of
food, power supply, the need for good quality seeds, fertilizer procurement, diseases, and

10
challenges such as poor rainfall, and so on. So these are the agricultural funding
requirements.

Agricultural Finance in India – A brief history:

Phase 1 (1951-69):
 Since the first FYP in 1951, there has been a focus on improving the primary
sector.
 In 1968, the National Credit Council underlined the importance of commercial
banks increasing their lending to small-scale industry and farmers.
 The nationalization of banks in 1969 accelerated the establishment of rural/semi-
urban bank branches.

Phase 2 (1970-1990)
 The 1970s saw the advent of commercial banks into agricultural financing
through the Lead Bank Scheme and the regulatory mandate of Priority Sector
Lending (PSL).
 The Regional Rural Bank Act of 1976 was created to provide banking and credit
facilities primarily for agricultural and other rural sectors.
 The National Bank for Agriculture and Rural Development (NABARD) was
founded in 1982 with the goal of promoting agricultural and rural development,
primarily through the funding of SHGs and MFIs.
 To expand outreach to rural areas, the RBI created the service area approach
(SAA) and the Annual Credit Plan (ACP) system in 1989.

Phase 3 (1991-onwards)

 Implementation of the Narasimham Committee Report of 1991 to improve bank

operational efficiency.
 In 1990, the first big nationwide farm debt waiver was issued.

11
  The Rural Infrastructure Development Fund (RIDF) was established in
collaboration with NABARD, with the primary goal of subsidizing rural
infrastructure projects.
 In 1992, NABARD launched a pilot project SHG-Bank Linkage Programme in
rural areas.

Farmers can obtain loans for a variety of agricultural activities. These tasks include
storage, production expansion, product marketing, finance, day-to-day operations,
purchasing land, and purchasing farming equipment or machinery such as tractors and
harvesters. In India, there are far too many different sorts of agricultural loans. If you
want to learn more about them, check out the points listed below.

 Crop Loan is the earliest sort of agricultural finance. Crop loans are available to
any farmer through the National Bank for Agriculture and Rural Development
and other commercial sector institutions.
 In addition, the Kisan Credit Card is a sort of farm loan in India. It was introduced
for the first time in India by Indian banks in 1998. Any farmer can borrow funds
at a rate of 7% per year for amounts up to Rs. 3 lakh.
 Other types of agricultural loans in India include combine harvester loans,
multipurpose gold loans, drip irrigation loans, tractor loans, poultry loans, and
dairy loans.
 One of the top institutions for farmer loans is the National Bank for Agriculture
and Rural Development. The NABARD is the only and most wonderful bank that
gives financial assistance to farmers. Agriculture loans include the Kisan Credit
Card Scheme, Nationalized Bank Loans, Private Sector Bank Agricultural Loans,
and State Bank of India Loans.

4. Meaning of Agri finance:

In general, agricultural finance refers to the study, research, and analysis of the financial
elements of the farm business, which is the important sector of the economy. The
financial factors include money concerns related to agricultural commodity production
and disposal. When we discuss the financial aspects of agriculture, we are referring to the

12
capital required for agriculture, the necessary funds raised, and the pattern of use of those
funds. Agricultural finance is a branch of agricultural economics that deals with the
provision of bank services and the management of financial farm units.

Agricultural finance is investigated from both a macro and a micro level. Macro finance
is concerned with the many sources of funding in the economy for agriculture as a whole,
as well as lending methods, rules, regulations, monitoring, and controlling procedures of
various agricultural institutions. Macro finance is concerned with the total credit demands
of the agricultural sector, the terms and conditions under which credit is available, and
the method of employing total credit for agricultural development. In contrast,
microfinance relates to the financial management of a single agricultural firm.

Features of Agricultural Finance:

o Risks in Agriculture:
In the agriculture industry, it is difficult to foresee risks and uncertainties.
Droughts, floods, and other natural calamities pose several risks and uncertainties
for farmers, all of which can inflict severe harm. Furthermore, agricultural food
deteriorates in storage due to a lack of suitable storage facilities to hold back
surplus when supply exceeds demand. It exacerbates the situation. Agriculture has
traditionally been a tough business for commercial banks and insurance
corporations to handle due to so many unknowns.

o Difficulties of Co-operation in Agriculture:

In the agriculture industry, there is almost no room for collaboration. This is due
to the fact that farmers are mostly individualistic and suspicious of working
together toward a shared aim. This makes it more difficult for farmers to secure
low-cost financing.
o Economic Lags in Agriculture:
Indian farmers require credit not only for production but also for consumption. In
the event of crop failure, small farmers require money to cover their consumption
demands. In addition, Indian farmers are accustomed to squandering on social and
religious occasions. Furthermore, litigation is a huge non-productive financial
demand.

13
 o Small Size of Farm:
Farms in India are small in comparison to the quantity of work and capital spent.
Furthermore, product yield and quality are uncontrolled. As a result, there is a
scarcity of security to be used as loan collateral.
o Lack of Proper Securities:
Large farmers have their own resources, allowing them to borrow money from
financial organizations. Small farmers have a difficult time obtaining credit to
meet their demands. It’s because small farmers don’t have adequate collateral to
put up as collateral for loans, nor do they have the financial means to repay them.
As a result, small farmers are forced to seek financial assistance from money
lenders.
o Complicated Procedures of Loans:
It has been revealed that in order to obtain credit, a number of prerequisites must
be met. The vast majority of farmers are ignorant and incapable of providing the
required information. Farmers choose to borrow money from money lenders and
pay a higher interest rate as a result. Furthermore, there is a large time lag
between loan application submission and loan acceptance.
o Improper utilization of Loans:
There is a mismatch between compensation and demand in the agricultural
industry. When farmers misuse the loans they have been provided, the problem
worsens. In other words, the loans are being used for non-productive purposes in
rural sections of the country.
o Mounting over dues:
The slowing of agriculture has resulted in an increase in delayed payments. Loan
cancellation efforts in various parts of the country should be regarded seriously.
In fact, it has established a negative precedent that will hinder future agricultural
advancement.
5. Classification of finance:
The need for Agricultural Finance can be classified into 2 categories:
1. Time-Based Agriculture Financing Requirements (Loans)
 Short-term loans are used to meet demands such as paying labour payments,
purchasing fertilizers, pesticides, seeds, feed (for livestock), and so on. These

14
 loans are available for up to 15 months. Farmers typically seek short-term
Agricultural Finance from cooperative societies and money lenders.
 Medium-term demands include the purchase of agricultural equipment, cattle,
and the construction or repair of wells on farmland. Loans acquired to meet these
obligations are typically for a term of 15 months to 5 years. Commercial banks,
cooperative societies, money lenders, and other lending institutions make loans to
support agricultural finance's medium-term demands.
 Long Term -: Long-term loans are required when farmers seek to purchase new
land or agricultural equipment such as tractors. These are for a minimum of five
years. Commercial banks, primary cooperative agricultural banks, and rural
development banks make these loans available.
2. Agriculture Finance Needs Based on Purpose
o Productive this category includes needs that have a direct impact on
productivity as well as the loans/credit used to meet them. It would involve the
purchase of fertiliser, seeds, small agricultural equipment, land improvement,
labour, and so on. Loans from institutional credit institutions are used to meet
these demands.
o Consumptive Due to a lack of capital wealth, small farmers may seek financing
to cover their consumption demands. Loans from money lenders are used to meet
these types of demands.
o Consumptive Due to a lack of capital wealth, small farmers may seek financing
to cover their consumption demands. Loans from money lenders are used to meet
these types of demands.
6. Sources of Agri finance:
Institutional Agricultural Finance Sources in India:
Cooperative organizations
Co-operative societies provide the most affordable loans for agricultural and associated
businesses. Primary Agricultural Co-operative Societies (PACS) are one of India's oldest
types of agri finance, offering short and medium-term loans for agricultural purposes.
Primary Co-operative Agriculture and Rural Development Banks make long-term loans

15
(PCARDBs). Long-term loans are also available via state cooperative agriculture and
rural development banks (SCARDBs).

Land Development Banks

Land development banks are one of the several forms of agricultural funding in India.
They are registered under the Co-operative Societies Act and are also known as land
mortgage banks. They are known as Agricultural and Rural Development Banks in
various states (ARDBs). These financial institutions provide long-term loans with land as
security.

Commercial Banks
While co-operative societies provide loans to farmers in need, commercial banks also
provide credit to farmers in need of financial assistance. Scheduled commercial banks
provide loans to farmers for the purchase of farm equipment and fees associated with
post-harvest activities. Loans are also available for dairy and fishing operations. Kisan
Credit Cards are issued by banks and can be used to withdraw cash from an ATM. The
Kisan Financing Card system was launched in 1998 to make credit more accessible to
farmers.

Regional Rural Banks

Regional rural banks, which are government-owned scheduled commercial banks, are an
important source of farm funding. They were established in 1975, following the
suggestions of the Narasimhan Working Group, and were governed by the Regional
Rural Banks Act of 1976.

Micro Finance
Farmers who do not have access to loans through banks or financial institutions, or who
do not have appropriate collateral, can turn to microfinance. Microfinance is the
provision of modest loans with no collateral by Microfinance Institutions (MFIs).

Non-Banking Financial Companies

16
Apart from all of these many forms of agricultural finance in India, one more important
source is the NBFC. An NBFC provides banking and credit to farmers who are not served
by standard banking. It is supported by online and user-friendly app-based platforms.

Non institutional sources of Agri finance:

Moneylenders, Agents, Traders and Landlords

Many agricultural families in India's rural finance environment have relied on
moneylenders for decades. However, interest rates are exorbitant, and moneylenders have
frequently pushed families into debt traps. The same is true for landlords that charge
unsustainable interest rates. Farmers can also obtain financing via commission agents or
dealers, but interest rates are relatively expensive when compared to institutional sources
of farm finance.

Relatives and Friends

Although family can be of assistance, they will only do so in times of financial
emergency.
Agriculture is an important part of the country's economy, contributing to both
employment and GDP. Farm credit and funding are critical for implementing optimum
agricultural practices and increasing output. Although non-institutional sources of farm
income have been accessible for decades, interest rates are exorbitant and sufficient
documentation is lacking. Farmers now have access to institutional financing thanks to
customized loan solutions made available by NBFCs enhanced by technology.
8. Weakness in rural credit structure.
Since independence, India's institutional agricultural lending framework has been
deplorable. Various initiatives were made by the government in the post-independence
period to develop the country's institutional agricultural credit framework, resulting in
constant increase in the base and sources of agricultural credit.
Both the cooperative sector, commercial banks, and rural banks are attempting to address
farmers' credit needs at the same time. Even so, there are a number of issues confronting

17
the country's agricultural finance structure that are impeding the agricultural sector's
development.
Some of these issues are as follows:
Inadequacy:
Despite the expansion of the rural credit system, the volume of rural credit in the country
remains insufficient in comparison to the country's expanding demand as agricultural
input prices rise.

Inadequate Sanction:
The quantity of loan sanctioned to farmers by the agencies is also insufficient to meet
their various aspects of agricultural activities. Farmers frequently redirect such loans for
useless reasons, diluting the very objective of such loans, because they consider the
amount of loan sanctioned to be inadequate and inconsequential.

Poor Farmers Receive Less Attention:

Rural lending institutions and their plans have failed to address the demands of small and
marginal farmers. As a result, less attention has been paid to the credit needs of poor
farmers, but credit agencies are paying more attention to the credit needs of comparably
well-to-do farmers due to their greater credit worthiness.

GrowingOverdues:
The issue of overdues in agricultural finance remains a source of worry. The repayment
of agricultural advances to various institutions is likewise inadequate. In 1997-98,
commercial banks, co-operative banks, and regional rural banks recovered 63%, 66%,
and 57% of agricultural advances, respectively.

Inadequate Institutional Coverage:

In India, the institutional credit structure remains inadequate in comparison to the
country's expanding needs. Cooperative lending institutions such as primary agricultural

18
credit societies, land development banks, commercial banks, and regional rural banks
have failed to reach all rural farmers in the country.

Redtapism:
Redtapism affects institutional agricultural credit. Financing institutions continue to use
burdensome procedures and formalities when providing loans to farmers, forcing them to
rely on more expensive non-institutional sources of credit.

9. Suggestions for improving rural credit structure.

19