top of page
Agriculture Drone

National Agriculture Infra Financing Facility

The Union Finance Minister has announced a game-changer in India's agriculture: the National Agriculture Infrastructure Financing Facility, or NAIF. The ₹1 lakh crore fund will revamp post-harvest management and community farming assets toward better growth and modernization in agriculture. Finance will be extended to farmers, FPOs, agri-enterprises, and others through concessional loans, interest subvention, credit guarantees, and other such interventions.

​concessional loans, interest subvention, credit guarantees, and other such interventions. 
 

The agricultural landscape of India is full of promise, but that promise can be fully realized only when it has a much more robust and modern infrastructure. Here is why the government saw this necessity by announcing the National Agriculture Infrastructure Financing Facility, NAIFF Scheme, in 2020. This ambitious program Provides funding of, ₹1 lakh crore for bridging this infrastructure gap, empowers a wide array of stakeholders across the agricultural value chain with an emphasis on fostering innovation in the Agri-Tech startup ecosystem. 

Get In Touch

Why NAIFF is a Game-Changer for Agri-Tech Startups 

NAIFF Funding addresses Unique Agri-Tech startup challenges by: 

  • Funding Gap Bridging: Funding is the biggest impediment to most startups. NAIFF will help fill these funding gaps so that capital in high demand are accessible to the startups, allowing them to scale up their activities and bring solutions with an innovative perspective to the market. This will be particularly important in the agriculture sector given that most startups lack traditional assets or credit history to secure conventional loans. 

  • NAIFF Funding Can Provide for a Wide Spectrum of Projects: From NAIFF, a critical spectrum of projects, many of which are considered important to agricultural development, can be provided for. These include: 

  • Post-harvest management: Technology start-ups that come up with innovative ideas in regard to efficient storage, processing, and transportation of agricultural produce can utilize NAIFF for building the critical infrastructure that saves losses and gets maximum value for farmers. 

  • Precision Agriculture: NAIFF supports startups in innovative solutions such as sensor-based irrigation, drone-based crop monitoring, and AI-based farm management to develop the capabilities of these technologies and invest in their research development and deployment. 

  • Market Linkages: Startups building platforms for direct sellers and buyers to link up with each other, offering online trading and looking at efficiency within the supply chain can deploy the NAIFF to improve their infrastructures and reach a wider market to make the marketplace of agriculture less opaque and more efficient. 

 

Providing financial incentives is NAIFF’s offer of 3% interest subvention up to ₹2 crore, thus reducing the cost of financing for the startups and making it an early-stage operational charge. 

 

The credit guarantee mechanism under NAIFF incentivizes institutions including the National Bank for Agriculture and Rural Development (NABARD) to finance Agri-Tech startups actively. It minimizes the risk perception related to lending to early-stage ventures, thereby streamlining access to credit. 

Agri-Tech Startups and What NAIFF Can Offer 

  • Innovate solutions: Funding support allows startups to invest in developing new and radical technologies that will help solve some of the most pressing challenges facing agriculture, including those in productivity, resource use optimization, and climate change resilience. 

  • Scaling Operations: NAIFF has the potential to expand the infrastructure for launching and reaching out to more farmers than ever before to make an even greater impact on the agricultural landscape. It might also connote the expansion of processing facilities, the base of a technology platform, or a distribution network. 

  • Improving access to markets: Infrastructure finance to cold storage facilities or logistics nets will better connect farmers with markets, thereby getting farmers the best prices for their produce and ensuring consumers of good products. 

  • Employment and Rural Growth: Agri-Tech start-ups create employment opportunities that continuously boost the growth of rural economies to avoid rural-urban migration and enhance the rural livelihood of many people. 

Key Features of NAIFF in India  

Sanction Amount: ₹ 1 lakh crore (about $13 billion USD)    ; 

Tenor: The scheme shall be operational till 2025-2026; 

Beneficiaries: All stakeholders: farmers, PACS, FPOs, agri-entrepreneurs and start-ups, state agencies, State-sponsored PPPs, etc.; 

Interest Subsidy: 3% interest per annum on loans up to ₹ 2 crores. 

Credit Guarantee: The amount of up to ₹ 2 crore will be covered under the credit guarantee fund trust for micro and small enterprises or CGTMSE. 

Integration: AIF is designed in such a way that it converges with other schemes of the central and state government. 

Online Platform: An online platform has been especially made so that access and application become easy. 

Accessing NAIFF 

  • Agri-Tech Startups: Agri-Tech start-ups can approach financing lending institutions such as banks, NBFCs, cooperative banks, etc. to borrow under NAIFF. The business plan should look convincing, and the feasibility and peculiarity of the project have to be justified, and specific requirements of the lending institution are met. 

  • Impact on the Wider Sector: Besides directly benefiting the startups, NAIFF has greatly contributed to the future-proof Agri-Tech ecosystem by promoting innovation, nudging private investment in the sector, building a vibrant ecosystem of agriculture technological startups, and providing an entrepreneurial environment in the agriculture sector. 

  • Support: NAIFF supports governmental initiatives for doubling the income of farmers, promoting digital agriculture, and strengthening the agricultural sector overall. The schemes that are being implemented to safeguard the interests of farmers and promote investment in agriculture include the National Agricultural Insurance Scheme, which curtails risks for the farmers. 

  • Collaboration with Organizations such as National Agro Foundation: NAIFF can partner with organizations similar to the National Agro Foundation- if such an organization exists technical assistance, mentorship, and capacity building so Agri-Tech startups take off in that line and thus cement the ecosystem even further. 

bottom of page