The NAIF Scheme (National Agri Infra Financing Facility) is a government initiative designed to boost the agricultural infrastructure in India.
With the agriculture sector playing a crucial role in the Indian economy, improving infrastructure like cold storage, warehouses, and processing units is essential for enhancing productivity and reducing post-harvest losses.
Through NAIF, entrepreneurs, startups, and businesses in the agriculture sector can access affordable loans to fund such projects, contributing to a more sustainable and efficient agriculture ecosystem.
"The NAIF Scheme aims to make the agricultural value chain more efficient, reduce waste, and increase farmers' income through improved infrastructure."
What is the Agriculture Infrastructure Fund (NAIF / AIF)?
The Agriculture Infrastructure Fund (NAIF) is a financial scheme introduced by the Government of India to support the creation and modernization of agriculture infrastructure projects.
This scheme aims to enhance the storage, processing, and logistics capacity of the agricultural sector. The ultimate goal is to make the agricultural value chain more efficient, reduce waste, and increase farmers' income.
Through NAIF, financial assistance is provided for setting up new agriculture infrastructure such as cold storage, warehouses, processing units, and custom hiring centers. This initiative is vital for increasing the shelf life of agricultural products and improving market access for farmers.
Who is Eligible for the NAIF Scheme?
The NAIF Scheme is available to a wide range of agricultural businesses and entrepreneurs:
FPOs (Farmer Producer Organizations)
Registered farmer groups or organizations working towards enhancing agricultural productivity and improving market access.
Private Companies
Private companies involved in the agriculture sector, aiming to build or upgrade infrastructure.
Individual Entrepreneurs
Any individual looking to invest in agricultural infrastructure projects.
Startups
New ventures in the agri-sector focused on innovation and modern infrastructure development.
MSMEs (Micro, Small, and Medium Enterprises)
Small-scale businesses that contribute to agriculture-related processing and infrastructure.
Eligibility Checklist:
- The land for the project must be owned or leased for at least 7–8 years.
- The project must involve new agricultural infrastructure development.
What Types of Infrastructure Projects are Covered Under NAIF?
The NAIF Scheme primarily focuses on new agriculture infrastructure projects:
Cold Storage
Establishment or modernization of cold storage units to preserve perishable products.
Primary Processing Units
Setting up processing units for raw agricultural produce, improving quality and marketability.
Warehouses
Construction of warehouses for storing agricultural products in bulk, reducing post-harvest losses.
Custom Hiring Centers
Establishing facilities where farmers can hire modern machinery at affordable rates.
Green House & Poly House
Setting up controlled environment farming structures for growing high-value crops.
Vertical Farming
Infrastructure for multi-layered farming systems that save space and water while increasing productivity.
Key Benefits: Interest Subvention & Repayment Terms
Interest Subvention
3%
The borrower gets the benefit of a lower interest rate compared to standard market rates. Approximate ROI is around 9%.
Repayment Tenure
7 Years
With an additional 2-year moratorium period, allowing you to focus on setting up and running the infrastructure before starting repayments.
Lending Institutions
Various financial institutions provide loans under the NAIF Scheme:
- National Bank for Agriculture and Rural Development (NABARD)
- Commercial Banks (State Bank of India, HDFC, etc.)
- Regional Rural Banks (RRBs)
- Scheduled Banks
How to Apply for the NAIF Scheme? (Step-by-Step)
- 1
Prepare the Project Report (DPR)
Create a detailed project report with technical, financial, and operational details of your agricultural infrastructure project.
- 2
Eligibility Check
The lender verifies land documents, business structure, financial stability, and project type to ensure you meet all criteria.
- 3
Submit Application
Upload your DPR, supporting documents, and business details through the designated financing institution.
- 4
Loan Sanctioning
Bank reviews the project, inspects the land if required, and approves the loan with interest subvention benefits.
- 5
Loan Disbursement
Funds are released as per project milestones and bank guidelines. Approval typically takes 2–6 weeks.
Approval Timeline: The approval process for the NAIF Scheme can take anywhere from 2 to 6 weeks, depending on the complexity of the project and the lender's internal processing time.
Documents Required for NAIF Loan
Note: A tailored document checklist is provided during onboarding along with DPR templates and financial formats.
Common Mistakes Applicants Make
Incomplete Project Reports
Missing or unclear details in the project report can lead to delays or rejection.
Ineligible Land
Using leased land with insufficient tenure (less than 7-8 years) can disqualify you from the scheme.
Incorrect Financial Documents
Ensure all financial documents are accurate and up-to-date to avoid delays in loan disbursement.
Failure to Meet Eligibility
Applicants sometimes assume they are eligible without checking the detailed criteria, leading to rejection.
Frequently Asked Questions
What is the full form of NAIF?
NAIF stands for National Agri Infra Financing Facility, a government initiative to fund agricultural infrastructure projects.
What types of projects are eligible for NAIF funding?
Eligible projects include cold storage, warehouses, processing units, polyhouse/greenhouse, vertical farming, and custom hiring centers.
How can I apply for the NAIF Scheme?
The application involves preparing a project report (DPR), checking eligibility, and submitting your application through an authorized financial institution like NABARD or commercial banks.
What is the interest rate on NAIF loans?
NAIF offers an interest subvention of 3%, with an approximate ROI of 9% on loans.
Who can apply for the NAIF Scheme?
Eligibility includes FPOs, startups, MSMEs, private companies, and individual entrepreneurs in the agriculture sector.
How long does it take to get approval under the NAIF scheme?
Loan approval can take 2 to 6 weeks depending on the project complexity and lender's processing time.
Conclusion
The NAIF Scheme offers a fantastic opportunity for agricultural businesses, startups, and MSMEs to improve their infrastructure with affordable financing options.
With an attractive loan amount of up to ₹2 Crore, 3% interest subvention, and 7-year repayment tenure, this scheme can help enhance the agricultural value chain and drive innovation in the sector.
Whether you're setting up cold storage, warehouses, or processing units, NAIF is a great resource for securing funding. If you need expert help in applying for the NAIF scheme, our consultancy team is ready to assist you from preparing your DPR to coordinating with banks for faster approval.
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