Bank Of Maharashtra introduces Maha Krishi Samrudhi Yojana

Agriculture is the backbone of India’s economy, making the support system for farmers and agro-based industries essential. Recognizing this, Bank of Maharashtra has introduced the Maha Krishi Samrudhi Yojana (MKSY), a comprehensive financial assistance program for food and agro-based industries, agri-infrastructure projects, and the development of agricultural infrastructure facilities. This initiative aims to nurture growth and sustainability in India’s agricultural sector.

Comprehensive Financial Solutions

The MKSY scheme is designed to cater to a wide range of stakeholders in the food and agro-processing sector. This includes individuals, proprietary firms, partnership concerns, farmer producer companies (FPCs), public and private limited companies, and LLPs. The bank understands the unique financing needs of agri-businesses and has structured the MKSY scheme to meet these needs effectively.

Key Features of MKSY

1. Finance for New and Existing Units: The MKSY scheme extends financial support to both new and existing food and agro-processing units and agri-infrastructure projects. This includes financing for the acquisition or construction of land and buildings, plant and machinery, and other project costs. The scheme also facilitates the takeover of existing units from other banks or financial institutions.
2. Cluster-Based Approach: The scheme adopts a cluster-based approach on a PAN India basis, financing borrower units with various types of fund-based and non-fund-based credit facilities. These include facilities mentioned below. The maximum loan limit under MKSY is up to Rs. 100 crores.

• Loans
• Working capital facilities
• Export credit (pre-shipment and post-shipment)
• Bill purchase
• Bill discounting
• Letters of credit (LCs)
• Bank guarantees (BGs)

Nurturing Growth: Margins and Ratings

To support the growth of agri-businesses, MKSY offers term loans and working capital limits at lower margins based on the project. For accounts with an aggregate exposure above Rs. 25 lakhs, internal credit ratings are conducted by the bank. For loan accounts with aggregate exposures exceeding Rs. 25 crores, external credit ratings are mandatory, with a minimum credit risk rating of “BBB”.

Savings and Support: Interest Rates and Concessions

Loans under the MKSY scheme are offered at competitive interest rates, determined by factors such as credit risk rating, collateral offered, and CIBIL MSME Rank. Additionally, the bank has waived processing fees for borrowers with a CIBIL MSME Rank of CMR-1 and CMR-2. For borrowers or units with a CIBIL MSME Rank between CMR-3 and CMR-6, the bank offers concessions in processing fees ranging from 25% to 50%.

Ongoing Financial Relief and Support

Bank of Maharashtra understands the financial challenges faced by agri-businesses and has structured the MKSY scheme to provide ongoing support. The repayment period for term loans is up to 10 years, including the moratorium period, which is determined based on the purpose of investment, the economic life of assets, and cash flows from the business. For working capital loans, an annual review and renewal are conducted, with all working capital loans being repayable on demand.

Unlocking Potential in Agriculture

The MKSY scheme’s unique features include its cluster-based approach, aligning with the One District One Product (ODOP) initiative by the Ministry of Food Processing Industries. This alignment ensures focused support for specific products in each district, enhancing the efficiency and effectiveness of financial assistance. The ODOP initiative aims to promote the processing of locally grown produce, thereby boosting local economies and creating employment opportunities.

Integration with ODOP and National Directives

By integrating with ODOP, the MKSY scheme supports the development of specialized agri-industries that can produce high-quality products for both domestic and international markets. This focused approach helps in building brand recognition for district-specific products and opens up new market opportunities.

Key Benefits of the Cluster-Based Approach:

• Targeted Financial Support: Concentrating resources on specific products within designated clusters ensures efficient use of funds.
• Enhanced Productivity: Shared resources, knowledge, and infrastructure within clusters lead to increased productivity and innovation.
• Market Expansion: Building strong market identities for district-specific products helps gain recognition and acceptance in broader markets.

Commitment to Modernizing Agriculture

The MKSY scheme aligns with the Department of Agriculture and Farmers’ Welfare’s directives. They aim to promote sustainable farming practices, improve supply chain efficiencies, and invest in advanced technologies. This includes:

• Green Technologies: Supporting investments in renewable energy, efficient water management, and eco-friendly packaging.
• Supply Chain Improvements: Developing cold storage facilities, transportation networks, and processing units to reduce post-harvest losses.
• Technological Integration: Encouraging the use of precision farming, IoT-based monitoring systems, and data analytics to enhance farm management and crop yields.

By integrating with national initiatives and offering comprehensive financial solutions, the MKSY plays a pivotal role in unlocking the potential of India’s agricultural sector.

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Conclusion

The Maha Krishi Samrudhi Yojana by Bank of Maharashtra offers a robust financial support system for food and agro-based industries in India. With its comprehensive financial solutions, competitive interest rates, and alignment with national initiatives, MKSY is poised to drive growth and sustainability in the agricultural sector. For more information, interested parties can visit the Bank of Maharashtra website.