Presented By :-

Avinash kumar

)

Loans are certain amount of money provided for certain purpose on certain condition with some interest ,which should be repaid sooner or later.

CLASSIFICATION OF LOAN

Based on time a. Short term loan = 6 – 18 Months Eg- crop loans

b.Medium term loan = 15 months – 5 years

Eg.- for purchasing implepents,el-motor,live stock loan etc.

c. Long term loan = 5 – 20 years

Ex - construction of farm building,tractor loan etc.

PURPOSE BASED LOANS

SOURCES OF FARM LOANS

Relatives Agricultural moneylenders Professional moneylenders Traders Cooperatives & commercial

Banks.…

COMMERCIAL BANKS

HOW A FARM LOAN IS SANCTIONED ? Step – 1

Interview with the farmer The banker studies the farmer –borrower

in the interview regarding his credit characteristics like- honesty

- frankness -progressive

thinking - repayment

capacity etc

Step – 2 Submission of loan application by

the farmerFarmer filled up following details in the

form: - location of farm - purpose of the loan - farm budget - financial statements etc…

Step – 3

Scrutiny of records The ownership and extent of land as

indicated in the relevant certificates are verified by the bank officials with village revenue officials.

Step - 4 Visit to farmers field before

sanction of loan- To verify the particulars given by the

farmer.- To verify the credit -worthiness .- To verify the trust-worthiness.- Take a look on technical feasibility etc..

Step-5 Criteria of loan eligibility 1.He should have sound character.2. He should not be a defaulter in the

past.3.He must be progressive outlook.4.He should ensure proper use of

credit etc……

Step-6Sanction of loanAfter examining all the aspects like -technical feasibility -economic viability -bankability of

proposed projects like-repayment

capacity,risk – bearing abilities etc.* After satisfying all these the loan is

sanctioned.

Step-7Submission of requisite

documentsFollowing documents are obtained by

banking institution : * Demand promissory note * Guarantee letter * Mortgage deeds * Installment letter etc…Note: type of requisite documents vary

with bank to bank.

Step-8Disbursement of loan As soon as execution of documents is

completed ,the loan amount is credited to the borrower account.

Note : The loan amount is disbursed in phased manner.

Step-9 Post credit follow -

up measuresA.O/B.M pays a visit to

the farmer to ascertain the proper use of the credit;

Provide technical advise if any.

ENDING STROKES : Farm loans solve the finance problem of

farmer Farms activities are enhanced

Increase in farm production

More income generate

Farmers are happy

All peoples are happy

India is happy………