First ever “Credit Guarantee Scheme” for Livestock Sector launched for rebooting rural economy by leveraging MSMEs

The Indian government has introduced a pioneering “Credit Guarantee Scheme” for the Livestock Sector aimed at revitalizing the rural economy and empowering Micro, Small & Medium Enterprises (MSMEs).

The Department of Animal Husbandry & Dairying (DAHD) has established a Credit Guarantee Fund Trust of Rs 750 crore to provide credit guarantee coverage to eligible lending institutions, enabling improved access to finance for the underserved livestock sector.

Significance of the Credit Guarantee Scheme:

The Credit Guarantee Scheme holds substantial importance for the livestock sector and the overall rural economy by:

Empowering Unprivileged Entrepreneurs:

• The scheme focuses on supporting first-generation entrepreneurs and underprivileged sections of society who lack collateral security for their ventures in the livestock sector.
• It provides them with financial assistance and access to credit facilities.

Boosting Livestock Sector:

• By providing credit guarantee coverage, the scheme encourages investments in dairy and meat processing, animal feed plants, breed improvement technology, waste management, and veterinary vaccine and drug manufacturing facilities.
• This will enhance the productivity and growth of the livestock sector.

Objectives of the Credit Guarantee Scheme:

Ensuring Project Viability:

• The primary objective of the scheme is to prioritize project viability over collateral security, ensuring that lenders evaluate credit facilities based on the sustainability and potential of the assets financed.

Bridging the Financial Gap:

The scheme facilitates access to finance for the unserved and underserved segments of the livestock sector, enabling them to receive financial support from lending institutions.

Encouraging MSME Participation:

• By extending credit guarantee to MSMEs, the scheme encourages their active participation in the livestock sector, which contributes significantly to rural economic development.

Key Points:

Establishment of Credit Guarantee Fund Trust:

• The DAHD has established a Credit Guarantee Fund Trust of Rs 750 crore to provide credit guarantee coverage to eligible lending institutions up to 25% of credit facilities extended to MSMEs in the livestock sector.

Stimulus Package under AtmaNirbhar Bharat Abhiyan:

• The establishment of the credit guarantee fund trust was approved under the Prime Minister’s AtmaNirbhar Bharat Abhiyan stimulus package of Rs. 15,000 crores for Animal Husbandry Infrastructure Development Fund (AHIDF).

Collaboration with NABARD:

• DAHD collaborated with NABSanrakshan Trustee Company Private Limited, a wholly owned subsidiary of NABARD, to establish the Credit Guarantee Fund Trust for extending credit guarantee to MSMEs under the AHIDF scheme.

Rule-based B2B Portal:

• The credit guarantee portal has been developed as a rule-based B2B portal, facilitating the enrollment of eligible lending institutions, issuance/renewal of credit guarantee cover, and settlement of claims under the scheme.

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