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January 09, 2025
Dairy farm business loans are available to anybody who wants to start, run, or improve their own farms. A small dairy unit with two to four mulch cattle can be established, as can a medium or large dairy unit, to collect, process, and distribute milk, manufacture milk products, build a cattle farm, or purchase crossbred or upgraded mulch animals.
What is a Dairy Farm Loan?
Farmers, individuals, businesses, and other company owners generally use dairy farm loan to finance their dairy enterprises. Loans for the dairy industry can be used for a variety of things, including the construction of farms, the purchase of dairy-related animals, the construction of milking parlors and storage sheds, the purchase of dairy products, the acquisition of farm machineries such as chaff cutters, and much more. The Government of India has done a fantastic job, of making it easier for dairy farmers to avail of loans under the Mudra loan for dairy farms. Under the NABARD program, individuals, first-time business owners, farmers, and dairy societies can apply for government loans for dairy production.
Best Banks & NBFCs For Dairy Farm Loan 2025
| Banks & NBFCs For Dairy Farm Loan | Interest Rate |
| SBI Dairy Farm Loan | 10%* onwards per annum |
| Bank of Baroda Dairy Farm Loan |
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| Central Bank of India Dairy Farm Loan |
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| J&K Grameen Bank Dairy Farm Loan | MCLR |
| Lendingkart Finance- Dairy Farm Loan | From 2% – 6% per month |
SBI Dairy Farm Loan
The dairy producers have access to financial resources through the State Bank of India (SBI). With the YONO Krishi Safal Dairy Loan, SBI seeks to grant the farmers’ wishes, and interested farmers can apply for a loan.
Usage:
- For the purpose of building milk houses and society offices
- Purchase of bulk chilling equipment, transport trucks, and automatic milk collection systems
Key Specifications SBI of Dairy Farm Loan
| Interest Rate | 10%* onwards per annum |
| Loan Amount | ● Automatic milk collection system – Max Rs. 1 Lakhs ● Milkhouse or Society office – Max. Rs. 2 Lakhs ● Milk vehicle – Max. Rs. 3 Lakhs ● Chilling Unit – Rs. 4 Lakhs |
| Repayment Tenure | 5 years with a start-up period of 6 months |
| Collateral | Mortgage of landed property or Guarantee of milk union |
| Margin | 15% |
| Eligibility | ● At least 1000 liters of milk each day must be supplied to the milk union. ● The final audit score should be an “A.” ● Audited balance sheet for the past two years ● Recent two years: Should be profitable. |
Bank of Baroda Dairy Farm Loan
The dairy producers have access to financial resources through the Bank of Baroda. The Scheme For Financing Mini Dairy Units aims to help farmers establish small dairy units with 2 to 10 milch animals. Interested farmers can apply for a loan online and offline.
Key Specifications of BOB Dairy Farm Loan
| Loan Amount | Min. Rs. 60,000 – Max. Rs. 6 Lakhs |
| Repayment Period | Max. 5 years with three months moratorium period |
| Offered to the following entities | Farmers, Individuals, Members of NGOs/Self Help Group (SHGs), and Joint Liability Groups (JLGs) |
| Margin | 10% |
| Interest Rate | As per business requirements |
| Unit size | Min. 2 – 10 milch animals |
| Eligibility | All persons including small and marginal farmers and agricultural laborers engaged in agriculture and allied activities. |
Central Bank of India Dairy Farm Loan
The Central Bank of India’s Cent Dairy Scheme is available to farmers and groups of farmers as well as to individuals, businesses, societies, firms, NGOs, and other entities.
Listed below are the loan amount that the Central Bank of India provides and their Interest rates:-
| Up to Rs.50,000 | 8.05% onwards |
| Above Rs.50,000 to up to Rs.5 Lakhs | 8.55% onwards |
| Above Rs.5 Lakhs to up to Rs.25 Lakhs | 9.05% onwards |
| Above Rs.25 Lakhs | 9.55% onwards |
Key Specifications CBI of Dairy Farm Loan
| Interest Rate | 8.05% onwards |
| Loan Amount | Based on the project and repaying capacity |
| Repayment Tenure | From 3 years – 7 years |
| Inspection Charges | NIL, up to Rs. 2 Lakhs |
| Processing Fee | NIL |
| Security | For loans up to Rs. 1 Lakhs |
| Hypothecation of Livestock and other assets Collateral | NIL |
| Eligibility | Individuals, farmers, groups of farmers, firms, companies, societies, NGOs etc. |
J&K Grameen Bank Dairy Farm Loan
The dairy producers have access to financial resources through the J&K Grameen Bank. This dairy loan scheme aims to provide farmers with enhanced production and marketing of pure milk, increase farmers’ daily income through value addition, provision for infrastructure like animal sheds, bulk coolers, etc., Increase employment opportunities for the underemployed rural youth and increase the average cattle farm size with the farmers so as to reduce cost on material inputs.
Key Specifications of J&K Bank Dairy Farm Loan
| Interest Rate | As per loan requirements |
| Processing Fee | 0.25% of the loan amount |
| Repayment Tenure | Max. up to 6 years |
| Margin Min. | 10% |
| Age Criteria | Min. 18 years and Max. 70 years at the time of loan maturity |
| Gestation period | 3 months |
| Collateral | Required |
| Unit Size | Min. 2 – Max. 10 milch animals |
| Eligibility | ● Individuals who reside in the branch’s service area. Priority should be given to women beneficiaries and veterans receiving pensions from our bank. ● The Scheme provides loans to Farmers, Self Help Groups, and Joint Farmers Groups. ● The designated beneficiaries should possess the knowledge and experience required to run the dairy unit. |
Lendingkart Finance- Dairy Farm Loan
For lenders to get the maximum benefits for their dairy farm, Lendingkart offers excellent business loans under the Dairy Farm plan and substantial flexibility under the terms of the dairy loan.
Key Specifications of Lendingkart Bank Dairy Farm Loan
| Interest Rate | From 2% – 6% per month |
| Loan Amount | Up to 85% of the dairy project cost |
| Processing Fee | 2% of the loan amount |
| Repayment Tenure | From 3 years – Max. 7 years |
| EMI options | Monthly/Bi-weekly |
| Pre-closure Charges | Nil |
| Eligibility | ● Already involved in dairy-related operations are farmers and independent business owners. ● Groups from the dairy agricultural industry, both organized and unorganized ● Lendingkart offers loans for dairy farms to NGOs, Milk Federations, Self-Help Groups (SHGs), and Milk Unions Cooperative Societies. |
In addition to the aforementioned banks and NBFCs, a number of additional financial institutions, including Canara Bank, Andhra Bank, Federal Bank, Bank of India, RBL Bank, IDBI Bank, etc. provide dairy farm loan to their clients.
Eligibility for Dairy Farm Loan
- The minimum age requirement is 18 years, while the maximum age is 70 years.
- Individuals, company owners, and farmers that have previously worked in the dairy industry and provide services to that industry
- Entities that qualify include NGOs, Self-Help Groups (SHGs), Joint Liability Groups (JLGs), Milk Unions, Cooperative Societies, and Milk Federations.
- Applicants with no prior financial institution failures
Features of a Dairy Farm Loan
- Interest Rate: This will fluctuate between lenders and be based on the applicant’s background and type of business.
- Depending on the project and business needs, the loan amount is used for things like the purchase of machinery, cars, storage facilities, chilling units, infrastructure for collecting milk, etc.
- Duration of Repayment: Up to 7 Years
- Cost of the project: Lenders will fund up to 85% of it.
- Minimal paperwork and a painless loan application method
- Instantaneous loan approvals and payments
- Applicants with no prior financial institution failures
Benefits of a Dairy Farm Loan
The dairy farm loan is provided by many big and prestigious banks. Dairy farming is very quickly developing into a lucrative industry, thus these loans are readily available to give the dairy sector a massive boost. The following are a few advantages that can be emphasized:
- The Dairy Farm Loan can be used for all dairy farming needs, including paying for daily expenses, building infrastructure for commercial requirements, etc.
- The loan application will be processed quickly and without difficulty.
- Its accessibility to rural areas is increased by the little paperwork needed to use this loan program.
- Individual banks can be contacted to discuss flexible repayment arrangements.
- increases employment prospects in this area and makes borrowing money simple.
- Individual farmers, groups of farmers, NGOs, business owners, cooperative societies, milk unions, etc. are just a few of the groups in society that can apply for a dairy farm loan.
Fees and Charges of a Dairy Farm Loan
Listed below in the table are the fees and charges of Dairy Farm Loan:
| Interest rate | May depend from bank to bank |
| Tenure of loan | 3 years and 7 years |
| Pre-closure charges | Nil |
| Repayment mode | EMIs |
| Processing fees | 2% of the loan amount. |
Documents Required for Dairy Farm Loan Approval
You will require the following paperwork to apply for a loan for a dairy farm:
- Identity documents such as a driver’s license, voter ID, PAN card, Aadhaar card, etc.
- Proof of address documents such as utility bills, ration cards, Aadhaar cards, etc.
- Pay stubs over the last six months
- Passport-sized photographs
- Proof of a dairy business’s registration
- Real estate deeds
How to Get a Dairy Farm Loan Online?
Online dairy farm loan are available from a number of lenders in India. You can apply for a dairy farm loan on the official website of the lender who provides this kind of credit. Simply complete the application form and send it together with the required documentation. The bank will examine the application, and if it is accurate, it will approve your loan request and deposit the requested loan amount into your bank account.
A dairy farm loan application is also available offline. All you need to do is bring the required paperwork to the bank location that offers dairy farm loan. A bank executive will assist you with the application process for a personal loan.
Financial Support Provided by DEDS
The Dairy Entrepreneurship Development Scheme (DEDS) offers competent financial assistance to people and businesses in a variety of categories, including:
For Purchasing Milk Testers, Chilling Equipment, and Milking machines
A subsidy of between Rs. 5 Lakhs and Rs. 6.67 Lakhs would be given to you if you invest Rs. 20 Lakhs for the aforementioned use.
For Establishing Little Dairy Farms
For 10 animal units, an investment of Rs. 6 Lakhs is required. The unit can include a minimum of 2 animals and a maximum of 10 animals. After that, you would receive a subsidy in the range of Rs. 1.50 Lakhs to Rs. 1.98 Lakhs. The most you can spend per animal unit is between Rs. 15,000 and Rs. 20,000.
Heifer Cows are Raised Using:
An investment of Rs. 20 Lakhs is required. After that, you’ll receive a subsidy worth between Rs.1.37 Lakhs and Rs.1.83 Lakhs. The maximum allowable subsidy is Rs. 33,000 for 5 calves.
To Purchase Dairy Processing Machinery to Create Milk Products
A 13.20 Lakhs rupee investment is required from you. A subsidy between Rs. 3.30 Lakhs and Rs. 4.40 Lakhs would be given to you.
Regarding Dairy Product Transportation and Cold Chain Hardware
A 26.50 Lakhs rupee investment is necessary. After that, you’ll receive a subsidy between Rs. 6.25 and Rs. 8.83 Lakhs.
Options for Cold Storage
A 33 Lakhs rupee investment is required in order to use dependable cold storage facilities. Your financial aid will start at Rs. 8.25 Lakhs to Rs.11 Lakhs.
Who can apply for DEDS?
DEDs applications are accepted by farmers, solopreneurs, groups from both organized and unorganized industries, Self-Help Groups (SHGs), dairy cooperative societies, milk unions and federations, and Panchayat Raj institutions.
More than one family member may receive assistance if separate units are put up at various locations and there is a minimum distance of 500 meters between farms. The user may only use the assistance once for each component.
Goals of the NABARD Subsidy Scheme
Agriculture lender NABARD offers specialized programs like the Dairy Entrepreneurship Development Scheme to promote the agricultural industry. This program assists dairy market entrepreneurs to establish dairy farms and spur future expansion by providing them with business assistance. A few principal goals of NABARD include:
- Increasing the number of milk production farms in the current era.
- Modern technological advancements boost milk production and advertise it on a large scale.
- Fostering independent work and upgrading the infrastructure.
- Preserving breeding stock and promoting the rearing of heifer calves.
NABARD- Dairy Entrepreneur Development Scheme (DEDS)
In India, dairy farming is a significant industry, and milk output is increasing yearly. The NABARD subsidy for dairy farming was introduced in an effort to strengthen dairy production in India even more.
| Interest Rate | Set in accordance with bank and RBI’s guidelines |
| Loan Amount | You can acquire a loan and government subsidies on units with a minimum cost of Rs. 22,000 and a maximum cost of Rs. 6 Lakhs. |
| Implementing Agencies | ● Commercial Banks ● Co-operative Banks ● Regional Rural Banks ● Rural Development Bank ● State Cooperative Agriculture Bank ● Urban Banks |
| Repayment Tenure | From 3 to 7 years |
| Capital Subsidy | ● 25% for farmers from the general category ● 33.33% for farmers from the SC/ST category |
| Loan Documentation | ● The borrower would be required to mortgage some documents pertaining to his land if the loan amount exceeds Rs. 1 Lakhs. ● Certificate of caste ● Identity document ● Project business plan sample |
| Eligible Entities | ● Farmers ● Entrepreneurs ● Groups of unorganized and organized sectors ● Self-Help Groups (SHGs) ● Dairy Cooperative Societies ● Milk Unions and Federation ● Panchayat Raj institutions etc |
Dairy Farm Loan Online Application NABARD
For your Dairy Farm Loan Online Application NABARD, the actions listed below must be taken by the applicant in order to get a NABARD subsidy for dairy farming:
Step 1: To avail of the Dairy Farming Loan Subsidy, choose a dairy activity that fits the dairy program and is eligible for a subsidy.
Step 2: Register your corporation as a specific kind of company or an NGO once you’ve chosen the dairy activity to avail of the loan.
Step 3: Prepare a business strategy in order to offer it to the bank or lender for your dairy farming loan subsidy.
Step 4: Obtain a bank loan for your dairy company.
Step 5: The bank will waive the last few EMIs if you repay the loan on schedule and in full through EMIs.
Also, read  |
| Pradhan Mantri MUDRA Yojana |
| Startup Business Loans |
| 10 Business Loan Schemes for Women Entrepreneurs |
| Machinery Loan |
| Business Loan under CGTMSE Scheme |
Frequently Asked Questions
How can I get a loan from the bank for a dairy farm?
To apply for a loan from the bank for a dairy farm, you need to provide vital documents such as proof of identity such as a PAN card, Aadhaar Card, Driving License, Voter ID, etc. Proof of address such as utility bill, ration card, etc. Salary slips for the last six months, passport size photographs, proof of registration of dairy business and property deeds.
Can I get a Mudra loan for dairy farming?
Yes, if you want to raise money for your dairy farming business, you can apply for a Mudra Loan under the Pradhan Mantri Mudra Yojana.
How much money is needed to start a dairy farm?
For a small-scale dairy farm to be established in India's rural or urban areas, an investment of up to 20 Lakhs is required. Starting a large-scale dairy farming enterprise can demand an investment of Rs. 1 crore or even more.
Which top lenders in India offer Dairy Farm Loans?
In India, numerous lenders provide their clients with loans for dairy farms. Among the lenders from which you can obtain a loan for a dairy farm are NABARD, IDBI Bank, State Bank of India, IDBI, Central Bank of India and Bank of India.
What is the security you may have to provide to avail of a dairy farm loan?
Most financial institutions request collateral or security for a dairy loan form.
What are the foreclosure charges I will have to pay on availing of a dairy farm loan?
If you want to foreclose your loan account, the lender most often cannot charge you any fees as long as you have already paid the first EMI. This regulation, however, might be utilised by other lenders.
