Credit Guarantee Scheme for Livestock

Credit Guarantee Scheme for Livestock

News: The Ministry of Fisheries, Animal Husbandry, and Dairying has launched the “Credit Guarantee Scheme” under the Animal Husbandry Infrastructure Development Fund (AHIDF) to support the rural economy by leveraging Micro, Small & Medium Enterprises (MSMEs) in the Livestock sector.

What is Credit Guarantee Fund?
• A credit guarantee fund is a fund that provides a guarantee to lenders for the repayment of loans given to borrowers, especially in the micro, small and medium enterprise (MSME) sector.
• The credit guarantee fund acts as a collateral substitute and reduces the risk of default for the lenders.
• It also enables the borrowers to access credit without any collateral or third-party guarantee.
• The Credit Guarantee Fund Trust, established in March 2021, is India’s first-ever fund trust under the Credit Guarantee Scheme for the agriculture and Animal Husbandry sector.
• It aims to significantly increase the number of MSMEs benefiting from the AHIDF scheme and strengthen the ecosystem for collateral-free credit from banks.

About Animal Husbandry Infrastructure Development Fund (AHIDF) scheme:
• It is a Central Sector Scheme launched by the Ministry of Animal Husbandry, Fisheries, and Dairying. Its aim is to encourage investments in dairy and meat processing infrastructure, as well as animal feed plants.

Key Features and Advantages:
• Under the scheme, the Department of Animal Husbandry & Dairying has established a Credit Guarantee Fund Trust of Rs. 750.00 crores (under NABARD), which provides credit guarantee coverage of up to 25% for credit facilities extended to MSMEs by eligible lending institutions.
• It aims to improve access to finance for underserved livestock entrepreneurs, especially first-generation and underprivileged individuals who lack collateral security.