New Delhi: The Department of Animal Husbandry & Dairying (DAHD) under the Ministry of Fisheries, Animal Husbandry, and Dairying announced on Thursday the launch of a new Credit Guarantee Scheme. This scheme, which falls under the Animal Husbandry Infrastructure Development Fund (AHIDF), aims to facilitate collateral-free credit for Micro, Small, and Medium Enterprises (MSMEs) in the livestock sector.
To ensure the smooth functioning of the scheme, DAHD has established a credit guarantee fund trust worth Rs 750 crores. This fund will provide coverage of up to 25% of loans disbursed to MSMEs by eligible banks and other lending institutions.
‘The credit guarantee scheme facilitates access to finance for the un-served and under-served livestock sector, making the availability of financial assistance from lenders to mainly first-generation entrepreneurs and underprivileged section of society, who lack collateral security for supporting their ventures,’ the ministry said in a statement.
The primary objective of the scheme is to shift the lender’s focus toward project viability and secure the credit facility solely based on the primary security of the financed assets. The establishment of the credit guarantee fund trust, which was approved under the Rs 15,000-crore AHIDF as part of the Prime Minister’s Atmanirbhar Bharat Abhiyan stimulus package, aimed to incentivize investments by various entities including entrepreneurs, private firms, MSMEs, farmers’ producers’ organizations (FPOs), and Section 8 companies.
These investments are intended to establish infrastructure for dairy processing and value addition, meat processing and value addition, animal feed plants, breed improvement technology, and breed multiplication farms. Furthermore, the ministry has developed a rule-based B2B portal, known as the credit guarantee portal, which enables the enrollment of eligible lending institutions under the credit guarantee scheme, facilitates the issuance and renewal of credit guarantee cover, and handles the settlement of claims.
‘The initiative of credit guarantee scheme taken by DAHD is expected to greatly increase the participation of MSMEs engaged in the livestock sector leading to increased flow of credit to the sector and strengthen the MSMEs to boost the overall rural economy through strengthening the livestock sector which is of one of the most potential sector seeking development,’ it said.
