Credit Guarantee Scheme for Livestock Sector

• 25 Jul 2023

For Prelims: MSMEs, Ministry of Fisheries, Farmers Producers Organizations (FPOs), Interest Subvention scheme.

For Mains: Economics of Animal-Rearing, MSMEs.

Source: PIB

Why in News?

The Ministry of Fisheries, Animal Husbandry and Dairying has launched the first ever “Credit Guarantee Scheme” under Animal Husbandry Infrastructure Development Fund (AHIDF) to facilitate collateral-free credit for MSMEs in the livestock sector.

What are the Key Features of the Credit Guarantee Scheme?

• Objective:
  • Strengthen credit delivery system and facilitate smooth flow of credit to Micro, Small & Medium Enterprises (MSMEs) engaged in the Livestock sector.
  • Increase access to finance for un-served and under-served livestock sector, with a focus on first-generation entrepreneurs and underprivileged sections of society.
• Credit Guarantee Fund Trust:
  • A Credit Guarantee Fund Trust of Rs. 750.00 crores have been established to provide credit guarantee coverage up to 25% of the credit facilities extended to eligible MSMEs by lending institutions.
• Interest Subvention:
  • The scheme offers an interest subvention of 3% on loans obtained from Scheduled Banks or National Cooperative Development Corporation (NCDC).
  • Borrowers can avail up to 90% of the total project cost as a loan.

What is Animal Husbandry Infrastructure Development Fund?

• The AHIDF has been set up as MSMEs and Private companies also need to be promoted and incentivized for their involvement in processing and value addition infrastructure.
• The AHIDF is a Central Sector Scheme under the Prime Minister’s Atma Nirbhar Bharat Abhiyan stimulus package of Rs.15000 crores for incentivizing investments in:
  • Dairy processing and value addition infrastructure.
  • Meat processing and value addition infrastructure.
  • Animal Feed Plant.
  • Breed Improvement technology and Breed Multiplication Farm.
  • Animal Waste to Wealth Management (Agri Waste Management).
  • Setting up of Veterinary Vaccine and Drugs Manufacturing facilities.
• Individual entrepreneurs, private companies, MSMEs, Farmers Producers Organizations (FPOs), and Section 8 companies are encouraged to invest in the Livestock sector through this fund.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Mains

Q. Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India. (2015)