Tag Archives: agri finance

How to get an LAP loan (Loan Against Property) for your agribusiness?

September 03, 2025

For agribusinesses seeking capital without compromising operational liquidity, a loan against property (LAP loan) offers a compelling solution. An agri LAP loan leverages your existing property—be it farmland, warehouse, or residential premises—to raise funds, typically at lower interest rates than unsecured credit. For those in the agriculture sector, LAP for farmers/agribusiness bridges the gap between capital needs and formal credit access, especially in the face of rising input/raw material costs. At Agriwise Finserv, we specialize in customized LAP loans for agribusinesses, offering higher loan amounts, longer tenures, and simplified processes tailored to the unique cycles of agriculture.

Current landscape & why an agri LAP loan makes sense?

In 2025, the average agriculture loan interest rate in India stands at approximately 8.2% per annum—a decline from around 8.7% in 2023—thanks to interest subvention schemes that lower effective rates to as little as 4% for prompt repayment. These favourable terms make securing an LAP loan especially attractive for agribusinesses looking for long-term funding.

On the micro-lending end, the cooperative government in Maharashtra has capped private moneylenders’ interest rates at 9% p.a. for secured agricultural loans, reinforcing the advantage of formal borrowing routes such as agri LAP loans. Moreover, MSME loan portfolios remained robust in FY25, with portfolios at risk (PAR) in the 31–90 day bucket at just 1.7%, highlighting the relative safety and reliability of structured, collateral-backed financing such as LAP.

Step-by-Step Guide: How to secure an LAP loan for your agribusiness

1. Assess your eligibility and property value

The first step is to evaluate whether you qualify for an LAP loan. Lenders usually consider the type of property, its current market value, and your repayment capacity. The loan amount is generally a percentage of the property’s value, often between 60–70%. Farmers and agribusinesses should begin by gathering valuation details of their property such as residential, commercial or industrial.

2. Understand the terms of the loan

Before applying, understand the basics: expected loan amount, interest rates, tenure, and repayment flexibility. Agri LAP loans typically come with longer repayment tenures (up to 15 years), making them suitable for businesses with seasonal income cycles. Knowing the terms upfront ensures you borrow wisely and avoid unnecessary strain later.

3. Prepare the required documentation

Documentation is crucial for approval. Generally required papers include proof of property ownership, identity proof, financial statements, and in some cases, details of the agribusiness operations. Preparing accurate documents in advance reduces processing delays and increases the chances of a smooth approval process.

4. Apply through a trusted channel

Once prepared, you can submit your application either offline or through digital platforms. This is where Agriwise adds value—its technology-driven platform guides farmers and agribusiness owners through the application process, ensuring eligibility checks, quick submission, and hassle-free communication with lenders. By doing so, Agriwise helps applicants save time and avoid common errors.

5. Plan the utilisation of the loan

After approval, it is important to use the loan against property strategically. Funds can be allocated toward expanding storage facilities, purchasing farm equipment, or maintaining steady cash flow during crop cycles. Agriwise also provides advisory support to help borrowers align the loan with their business goals and repayment capacity.

Advantages of choosing an agri LAP loan through Agriwise

Lower interest costs compared to unsecured or informal credit
Longer tenures, up to 15 years, mitigating EMI pressures
Higher LTV, preserving capital for other needs
Formal, regulated lending environment, reducing risk of predatory terms
Less documentation & BT with top-up loan option available

This makes an LAP loan a strategic instrument for building resilience in your agribusiness.

Conclusion

Securing an LAP loan for your agribusiness is not just about unlocking capital—it’s about choosing a sustainable, cost-effective financing structure that aligns with long-term productivity goals. With competitive rates of interest and supportive platforms like Agriwise streamlining access, now is an ideal time to explore agri LAP loans.

Let Agriwise help you navigate the journey—from eligibility and documentation to approval and strategic utilization. When structured right, a loan against property can be the growth catalyst your agribusiness needs—secure, efficient, and attuned to the pulse of Indian agriculture.

Disclaimer

The content published on this blog is provided solely for informational and educational purposes and is not intended as professional or legal advice. While we strive to ensure the accuracy and reliability of the information presented, Agriwise make no representations or warranties of any kind, express or implied, about the completeness, accuracy, suitability, or availability with respect to the blog content or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. Readers are encouraged to consult qualified agricultural experts, agronomists, or relevant professionals before making any decisions based on the information provided herein. Agriwise, its authors, contributors, and affiliates shall not be held liable for any loss or damage, including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from reliance on information contained in this blog. Through this blog, you may be able to link to other websites that are not under the control of Agriwise. We have no control over the nature, content, and availability of those sites and inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them. We reserve the right to modify, update, or remove blog content at any time without prior notice.

A Complete Guide to Agriculture Loan Options for Farmers in 2025

August 07, 2025

In 2025, securing the right agriculture loan will be crucial for Indian farmers to thrive. From crop loan schemes to MSME finance, solar loan for farmers, and agri business loan options, this guide from Agriwise helps you navigate the best agriculture loan options in India.

Agriculture loan landscape: Key figures & trends

In FY 2024‑25, formal farm credit in India rose to ₹28.98 lakh crore, with projections to exceed ₹31.5 lakh crore in FY 2025‑26—over ₹32 lakh crore per NABARD forecasts. Over 60% of this is short-term crop loan schemes financing seasonal needs, with the rest supporting investment in machinery, infrastructure, and allied sectors. In addition, short-term credit has nearly doubled since 2014‑15, and the share of small and marginal farmers accessing agriculture loans has grown to 76% in 2023‑24 according to PIB.

As per Farmonaut, projected average agriculture loan interest rate in India for 2025 is approximately 8.2% p.a.—down from around 8.7% in 2023—with effective rates as low as 4% for prompt repayment under interest subvention schemes.

Top Types of Agriculture Loan Options

Crop loan schemes / Farmer loan 2025: Under NABARD–GoI interest subvention, crop loans up to ₹3 lakh are extended at 7% nominal interest, and farmers repaying promptly may get an extra 3% discount—bringing the effective rate to just 4%. Kisan Credit Cards (KCC) provide working capital credit for seeds, fertilisers, labour, with repayment aligned to harvest cycles. These are top agri finance tools for short‑term needs.
Farm equipment finance & Agri business loan: Long‑term farm equipment finance supports buying tractors, drip irrigation, solar pumps, or machinery—with tenures of 3–7 years and interest rates in the range of 6%–10% depending on collateral and green technology focus. For larger ventures, agri business loan options are available from banks like HDFC or ICICI with rates from 9%–11%, requiring business plans and a bit of collateral.
Agri‑infra, warehouse finance & working capital loan for farmers: Under NABARD’s AMI sub-scheme, a credit-linked facility offers a subsidy of 25–33% for projects such as warehouses, cold-storage, and market infrastructure—supported via warehouse finance options for small and medium-scale infrastructure borrowers. Working capital loan for farmers via MSME credit lines help with post‑harvest costs, sorting, packaging, or distribution.
Collateral‑free agri loan & MSME loan for agriculture: Thanks to RBI’s policy, small and marginal farmers can access collateral free agri loan up to ₹2 lakh (recently raised from ₹1.6 lakh), via banks or small finance banks. For agri‑based micro, small and medium enterprises like FPOs or food‑processing firms, MSME loan for agriculture and invoice discounting for agri MSMEs provide credit tied to receivables and inventory. NABARD’s NABSAMRUDDHI and NABKISAN schemes support MSME finance and FPO loan schemes with targeted support.
Loan against property for farmers & solar loan for farmers: Term loans backed by real estate—loan against property for farmers—are available at 7‑9% interest rates, supporting working capital or expansion. Similarly, solar loan for farmers helps install solar pumps or panels, often with concessional rates and refinance support from NABARD, aiming to reduce energy costs and promote sustainability.
FPO loan scheme & government loan for farmers: NABARD and government‑backed FPO loan scheme targets Farmer Producer Organisations, giving upto 100% refinance and grant support. Various state governments—e.g., UP’s Rs 5,000 crore subsidised scheme—provide government loan for farmers with special interest subsidies (~3%) to modernise cold storage and farm infrastructure.

Choosing the Right Agriculture Loan in 2025

Role of NABARD schemes 2025 & Agriwise services

NABARD Schemes 2025 such as STCRC, LTRCF, AMI sub‑scheme, dairy lending, KCC refinance and agro‑infrastructure refinance underpin most agriculture loan options—ensuring subsidised rates, refinance support, and grants.

At Agriwise, we offer end‑to‑end assistance in identifying the best loan for farmers in India—from applying for KCC crop loans, MSME loan for agriculture, FPO loan scheme, solar loans, and connecting you with lenders offering farm equipment finance, collateral‑free options, working capital loans, or even loan against property. We help you compare by interest rate, tenure, and eligibility to ensure you get the optimal credit solution.

Tips to Secure Best Agriculture Loan 2025

Choose the right category—short‑term crop loan, MSME finance, solar loan, infrastructure, etc.
Repay promptly to access better agriculture loan interest rate such as the 3% prompt repayment incentive.
Join JLGs (Joint Liability Groups) or FPOs for easier access to collateral‑free or group‑supported loans.
Use bankable business plans for agri business loan or equipment finance.
Access government or NABARD schemes via Agriwise to streamline application and documentation.

Conclusion

In 2025, agriculture loan options in India span crop loans, working capital, equipment finance, agri‑infrastructure support, solar financing, collateral‑free credit, and FPO/MSME schemes. Interest rates range from as low as 4% for crop loans to around 9‑11% for business/investment loans, powered by government and NABARD interventions. With over ₹31–32 lakh crore in total farm credit expected in FY 2025‑26, farmers have unprecedented access to formal credit channels.

Whether you’re a smallholder seeking collateral-free agri loan, an FPO exploring invoice discounting for agri MSMEs, or a solar‑pump owner evaluating a solar loan for farmers, Agriwise can guide you through the process—from matching schemes to application support. Maximise your productivity and growth with the best agriculture loan strategy to empower your farming future.

Disclaimer

Future of Agricultural Finance: What’s Changing for Rural Borrowers?

June 25, 2025

As India’s farming sector continues to modernise, agricultural finance is playing an increasingly crucial role in supporting rural livelihoods, enhancing productivity, and promoting sustainable growth. The future of agri finance is being reshaped by digital technology, government schemes, and evolving credit models that are transforming how rural borrowers access capital. From traditional seasonal loans to innovative credit tools, the entire value chain of agriculture financing in India is adapting to meet the rising needs of farmers in 2025 and beyond.

As per the Press Information Bureau, over the past decade (2014-15 to 2023-24), agricultural credit disbursement has witnessed an average annual growth rate of more than 13%, reflecting the increasing financial support extended to the sector. In the financial year 2023-24, agricultural credit disbursement reached ₹25.48 lakh crore. For FY 2024-25 the Government of India has set a GLC target of ₹27.5 lakh crore with a dedicated sub-target of ₹4.20 lakh crore for allied activities.

The Changing Landscape of Agricultural Finance

For decades, rural credit in India has been largely dependent on informal sources and subsidised lending through public-sector banks and cooperatives. While this helped bridge immediate capital gaps, it often left farmers vulnerable to exploitation and underfunded for long-term needs. However, in recent years, the sector has witnessed a dynamic shift toward formal, tech-enabled, and farmer-centric financial models.

Key trends reshaping agricultural finance include:

Digitisation of loan disbursement and repayment: With the increased penetration of smartphones and internet connectivity in rural areas, financial institutions are utilising digital platforms to process and disburse loans faster and more securely.
KYC-linked access to credit via Jan Dhan accounts: The government’s financial inclusion drive through the Jan Dhan Yojana has provided millions of farmers with formal banking access, enabling direct benefit transfers, crop insurance claims, and more transparent rural credit in India.
Customised loan products: Banks and NBFCs are now offering crop-specific, equipment-based, and input-linked loans tailored to individual farmer profiles.
Credit scoring through agri-data: Lenders are leveraging weather data, satellite imagery, soil health records, and market trends to assess creditworthiness, especially for first-time borrowers without collateral.

These developments mark a clear shift in agriculture financing in India—from reactive lending to proactive, risk-assessed financial solutions.

Agri Finance Trends 2025: What to Expect

As we look toward 2025, several agri-finance trends are expected to shape the sector further:

Integration of agri-fintech platforms: Startups and agri-focused fintechs are creating seamless digital ecosystems that enable farmers to access loans, insurance, market prices, and advisory services through a single app.
Climate-resilient finance: Lenders are increasingly factoring climate risk into their decisions and offering products such as weather-indexed insurance and resilience loans to help farmers recover from crop losses.
Value chain financing: Financing is moving beyond production to cover the entire agri value chain—including warehousing, processing, and marketing—creating new opportunities for FPOs and agri-entrepreneurs.
ESG-aligned lending: Sustainable farming practices and traceability in agri supply chains are attracting ESG (Environmental, Social, Governance) aligned investments, incentivising farmers who adopt eco-friendly methods.

These agri finance trends 2025 reflect a growing acknowledgement that rural borrowers are no longer just recipients of credit—they are active participants in a larger, data-driven, and value-oriented ecosystem.

The Role of Agriwise: Empowering Farmers with Smart Finance

Agriwise, one of India’s leading agri-financing institutions, is at the forefront of enabling the future of agricultural finance through a unique blend of technology, partnerships, and farmer-first solutions.

With a mission to provide timely and affordable credit to India’s rural backbone, Agriwise offers:

Customised term loans and working capital for farmers, agri-input dealers, processors, and traders.
Digital loan processing with minimal paperwork and faster turnaround, leveraging data analytics and remote verification.
Partnerships with FPOs and input companies to expand the reach of structured credit offerings.
Risk mitigation tools, such as insurance tie-ups and advisory services, enhance credit sustainability.

By addressing both the supply and demand side of rural credit, Agriwise ensures that financial support is not just available but also accessible and impactful for India’s farmers. Their work exemplifies the kind of financial innovation needed to drive inclusive growth in agriculture financing in India.

Bridging the Gaps: Challenges and Opportunities

Despite the progress, several challenges persist in ensuring the full potential of agri finance is realised:

Many smallholder farmers still lack formal credit history or collateral.
Credit penetration in tribal, remote, or rainfed regions remains low.
Women farmers continue to face barriers in accessing loans.

To address these, greater emphasis is needed on credit awareness, digital literacy, gender-inclusive policies, and improving last-mile delivery. Strengthening rural banking infrastructure and encouraging public-private partnerships will also be crucial.

On the other hand, rising agri exports, increasing food processing investments, and growing rural entrepreneurship are creating fresh avenues for structured agricultural finance.

Conclusion

The future of agri finance in India is being driven by innovation, inclusivity, and integration. As traditional lending models give way to more innovative, data-led, and customer-oriented approaches, rural borrowers are gaining more control over their financial decisions. Agriwise is redefining how agricultural finance is delivered and the road ahead looks promising for millions of farmers who now see finance not as a burden—but as a tool for growth, security, and prosperity.

As we step into the next chapter of rural credit in India, one thing is clear: agriculture and finance are no longer parallel tracks—they are converging to create a robust, resilient, and digitally empowered farming future.

What are the future trends in Indian agribusiness & MSME finance?

June 11, 2025

As India marches toward becoming a $5 trillion economy, MSME finance and agribusiness continue to drive inclusive and sustainable growth. With nearly 63 million micro, small and medium enterprises (MSMEs) contributing around 30% to India’s GDP, and agriculture employing over 50% of the workforce, both sectors demand innovative, tech-led financial solutions.

Agricultural credit in India is projected to exceed ₹31.5 lakh crore in FY26, driven by increased formalisation of rural credit—signalling a shift toward more structured, data-backed, and accessible financial systems.
Let’s explore the key agribusiness trends and the evolving landscape of MSME credit solutions shaping India’s economic future.

1. Rise of Digital Lending Platforms

One of the most defining developments in MSME finance is the rapid growth of digital lending. Startups and NBFCs are using alternative credit scoring methods—such as transaction data, utility payments, and GST returns—to extend loans to borrowers who were traditionally excluded from the formal financial system.
This evolution is crucial as millions of businesses lack formal credit histories. Fintech for MSMEs has emerged as a lifeline, especially post-pandemic, offering fast, collateral-free access to capital—reducing dependency on unorganised lenders and improving financial inclusion across rural India.

2. Co-Lending Models: Banks + NBFCs = Wider Reach

To bridge the significant credit gap, co-lending partnerships between banks and NBFCs have gained momentum. Banks offer a lower cost of capital, while NBFCs provide last-mile reach. This hybrid approach is enabling faster and more effective disbursement of MSME loans in 2025, particularly to underserved areas.
In fact, NBFCs have become key contributors to MSME finance in India, outperforming banks in disbursement volumes in the last fiscal year. This collaboration also fosters tailored credit offerings, better suited to the real-time needs of small businesses and agri-entrepreneurs.

3. Government-Led MSME Finance Solutions

The government’s focus on MSMEs has intensified through schemes such as the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises). As of late 2024, CGTMSE had facilitated over ₹5.2 lakh crore in guarantees. The recent budget also announced the introduction of MSME credit cards, offering working capital limits of up to ₹10 lakh under automatic guarantee coverage.
These initiatives are expected to enhance the accessibility of MSME loans in 2025, especially for first-generation entrepreneurs, women-led enterprises, and rural agri-based MSMEs—boosting job creation and economic resilience.

4. Green Finance: A Sustainable Future for Agribusiness

As sustainability gains priority across industries, MSME finance is also adapting. Financial institutions are offering incentives for eco-friendly initiatives—such as solar-powered agri equipment, organic farming, and energy-efficient food processing units.
This alignment with ESG (Environmental, Social, and Governance) goals is a key future trend in agri finance, helping agribusinesses reduce carbon footprints and qualify for better financing terms. Dedicated schemes, such as RAMP and green funds, are expected to drive this transition forward in 2025 and beyond.

5. Embedded Finance and Supply Chain Digitisation

With more MSMEs and agri-enterprises going digital, embedded finance—offering financial services directly within non-financial platforms—is transforming the way loans and payments are accessed. Businesses using marketplaces, ERP systems, or mobile apps can now access MSME credit solutions without leaving their digital ecosystems.
Simultaneously, digital supply chain finance is growing, supporting vendors, distributors, and processors with faster payments, credit lines, and invoice discounting. This is a critical development for agribusinesses relying on seasonal liquidity and fluctuating input costs.

6. AI-Powered Lending & Risk Assessment

The integration of AI and analytics in credit evaluation is redefining MSME finance. By utilising satellite imagery, crop monitoring data, and transaction analytics, lenders can more accurately assess risks and process loans more efficiently. This is particularly impactful in agri-finance, where traditional underwriting methods often fall short.
This data-driven approach ensures that borrowers with viable but informal operations are not left out. It also boosts credit discipline and helps institutions maintain portfolio health while serving new-to-credit segments.

7. Supportive RBI Policies & Rate Cuts

In June 2025, the Reserve Bank of India reduced the repo rate and cash reserve ratio, aiming to boost liquidity in the banking system. These changes are expected to make MSME loans in 2025 more affordable and accessible.
With MSMEs accounting for just 16% of formal credit but over a quarter of GDP, such measures are essential to balance risk and support expansion, especially in agri-linked businesses that face seasonal cash flow cycles.

The Road to MSME Finance: Empowering India’s Growth Engines

The future of MSME finance in India is poised for greater inclusion, efficiency, and resilience. Here’s a snapshot of the key agribusiness trends and financing shifts:

Digital lending to expand credit access and formalise small businesses
Co-lending models for deeper credit penetration in underserved markets
Green and ESG-aligned loans to support sustainable agribusiness growth
Embedded finance and supply chain tools for seamless MSME funding
AI-powered crop and enterprise finance for smarter credit risk evaluation
Policy push and credit guarantee schemes for risk mitigation and affordability

With evolving borrower needs and a supportive policy environment, these trends will drive the next wave of growth in both agribusiness and MSMEs.

Agriwise: Enabling the Future of Agri and MSME Finance

At Agriwise, we are proud to be part of India’s evolving MSME finance journey. Our offerings are designed to empower farmers, traders, and agri-based businesses with timely, transparent, and tech-driven credit access.

Through our warehouse receipt financing, we help farmers turn stored produce into instant working capital, eliminating distress sales and enabling smarter price realisation.
We combine field-level insights with data analytics and fintech tools to offer tailored credit assessments—redefining MSME credit solutions for the agri sector.
Our growing network of bank partnerships and co-lending arrangements makes MSME loans in 2025 more accessible and flexible.
Agriwise is also committed to sustainability, financial literacy, and empowering women and first-generation agri-entrepreneurs with responsible access to credit.

As the future of agri finance becomes smarter and more inclusive, Agriwise remains committed to enabling India’s farmers and MSMEs with the financial tools they need to succeed.

How to Apply for a Warehouse Receipt Loan at Agriwise: A Step-by-Step Guide

June 05, 2025

A warehouse receipt loan can be a lifeline for farmers, traders, and processors who need liquidity without having to sell their produce at suboptimal prices. Agriwise Finserv, a trusted name in agri-focused lending, offers this facility as part of its commodity finance portfolio, providing short-term working capital against the value of agricultural stock stored in approved warehouses.

India’s agricultural credit target has been set at ₹20 lakh crore for FY 2024–25, and the emphasis on inclusive rural finance is growing; understanding how to apply for a loan against warehouse receipt is more relevant than ever.
But how to apply for one? Here’s a step-by-step guide to navigating the process of applying for a warehouse receipt loan at Agriwise.

Step 1: Customer Walk-in or Lead Generation

The journey begins with the customer—whether a farmer, commodity trader, or processor—approaching Agriwise through its branch office, field location, or sales team. During this initial interaction, the Agriwise team shares key details about the agri loan product, including loan tenure, interest rates, eligibility, and repayment options. This conversation helps establish clarity and sets expectations, ensuring the applicant is well-informed before moving forward.

Step 2: Lead Creation in Loan Origination System (LOS)

Once the customer agrees to proceed, their details are digitally entered into Agriwise’s Loan Origination System (LOS). This step includes capturing:

KYC documents
Financial and business background
Details of the agricultural commodities to be pledged

Using LOS ensures a systematic and efficient onboarding process, reducing delays and paperwork.

Step 3: Credit Appraisal

Agriwise then conducts a thorough credit appraisal. A credit bureau check is performed to assess the borrower’s credit history, followed by an internal evaluation against Agriwise’s credit policy. Parameters like repayment behaviour, past borrowing records, and current eligibility are taken into account.

This step ensures that credit is extended responsibly, ensuring the security of both the borrower’s and lender’s interests.

Step 4: Case Sanction and Documentation

Once the application passes the credit check, the case is sanctioned. The borrower is then required to complete the documentation process, which includes signing the loan agreement and other pledge-related papers. Agriwise ensures that all documentation is transparent, giving the borrower complete visibility into the terms and conditions.

Step 5: Commodity Pledge and Warehouse Receipt Generation

The borrower deposits the agricultural commodities at an Agriwise-approved warehouse. A designated Collateral Manager (CM) checks the quality and quantity of the stock. Once satisfied, the CM issues a warehouse receipt in favour of Agriwise and forwards it to the credit operations team.

This warehouse receipt is the basis for the loan and reflects the value of the pledged commodity, making it the cornerstone of the loan against warehouse receipt process.

Step 6: Disbursement of Funds

Agriwise disburses funds to the borrower based on the value of the warehouse receipt. Generally, loans are offered up to 75% of the WR value, which is known as the Loan-to-Value (LTV) ratio.

This quick access to funds allows borrowers to manage their short-term working capital needs efficiently, be it to finance the next crop cycle, pay labour, or meet operational expenses—without the pressure to sell produce immediately.

Step 7: Repayment and Collection

Repayment terms are flexible:

For farmers: Both interest and principal are repaid at the end of the loan term.
For traders and processors: Interest is payable monthly, and the principal is repaid at maturity.

Importantly, Agriwise does not levy foreclosure or part release charges. This flexibility gives borrowers the freedom to repay as per their cash flow, especially in times of market volatility.

Why Warehouse Receipt Loans Matter?

With only about 30% of India’s small and marginal farmers having access to formal credit, innovative solutions like warehouse receipt loans are crucial. They allow borrowers to realise better value for their produce by avoiding distress sales, while also ensuring that the agricultural supply chain continues to function smoothly.

These loans are particularly powerful because they are asset-backed, low-risk for the lender, and timely for the borrower—fitting perfectly into the broader ecosystem of commodity finance.

Conclusion

Agriwise’s approach to warehouse receipt loans combines the assurance of physical collateral with a fast, transparent lending process. Whether you’re a farmer waiting for better prices or a trader looking for liquidity, a loan against warehouse receipt can offer the breathing space you need—without compromising the value of your produce.

By turning stored crops into working capital, Agriwise continues to play a key role in strengthening India’s rural economy, one loan at a time.

What Every Farmer Should Know About Crop Insurance in India

May 21, 2025

India’s agriculture sector, a backbone of the country’s economy with almost 18% GDP contribution, remains highly vulnerable to climate risks such as droughts, floods, unseasonal rainfall, and pest infestations. To safeguard livelihoods, crop insurance in India plays a critical role in minimising financial risks and helping farmers recover from crop loss.

India’s crop insurance market is projected to witness a CAGR of 7.62% during the forecast period FY2025-FY2032, growing from USD 4.56 billion in FY2024 to USD 8.21 billion in FY2032.

What is Crop Insurance?

Crop insurance is a financial safety net that compensates farmers for crop losses due to unforeseen events like natural disasters, pests, or diseases. It reduces income uncertainty, stabilises farm income, and encourages investments in better farming practices. Understanding how crop insurance works is key to long-term sustainability for any farmer. There are multiple agriculture insurance schemes in India, both government-sponsored and private:

Government-backed schemes are widely accessible and subsidised. The Pradhan Mantri Fasal Bima Yojana (PMFBY) remains the flagship initiative, offering coverage from pre-sowing to post-harvest stages.
Weather-Based Crop Insurance Scheme (WBCIS) insures against adverse weather patterns like temperature or rainfall deviations.
Licensed insurers offer private crop insurance for high-value or non-notified crops.

Each scheme offers different levels of protection, and farmers should evaluate which suits their crop, region, and risk exposure best to identify the best crop insurance scheme. To benefit from these schemes, farmers must meet certain crop insurance eligibility criteria:

They should be land-owning cultivators, sharecroppers, or tenant farmers.
Registration must be completed within the stipulated enrollment period.
Aadhaar-linked bank accounts and relevant land records are required for claim disbursement.

How to Apply for Crop Insurance?

Farmers can learn how to apply for crop insurance through multiple channels:

Government platforms like the PMFBY portal
Common Service Centres (CSCs)
Local agriculture offices and banks
Mobile apps and direct insurer tie-ups

Timely enrollment is critical, especially during the sowing window.

PMFBY Scheme 2025: What’s New?

As of the PMFBY scheme 2025, improvements have been introduced to increase efficiency:

Use of remote sensing, drones, and mobile apps for faster claim assessment.
Voluntary participation with greater customisation.
Direct transfer of claims to farmer accounts.
These upgrades aim to enhance the PMFBY application process and reduce delays, making it a model crop insurance for farmers.

What are the benefits of this scheme?

Affordable premium rates (as low as 1.5% to 5%)
Comprehensive coverage for a wide range of crops
Transparent and technology-enabled claim processing
This scheme continues to be a lifeline for millions of farmers nationwide.

How is Agriwise enhancing farmer resilience?

Beyond insurance, farmers often need flexible financing to manage inputs, harvest costs, or expansion. Agriwise supports this journey with a range of credit solutions tailored to the agricultural ecosystem:

Farmer Financing: Offers working capital and input loans to purchase seeds, fertilisers, and pesticides.
Warehouse Receipt Finance: Enables farmers to secure short-term loans by pledging stored produce.
Secured Business Loans (LAP): Loans from ₹5 lakhs to ₹5 crores for agribusiness growth against residential or commercial property.
Invoice Bill Discounting: Converts invoices into immediate cash flow, ideal for agri supply chains.
Solar Financing: Affordable credit for adopting solar energy in farms or agro-units.

Agriwise combines tradition with fintech innovation to make agri-credit simpler, faster, and more inclusive—supporting farmers beyond just insurance.

Conclusion

Navigating agricultural risks is a part of every farmer’s journey, making crop insurance in India a vital tool for financial protection. While schemes like PMFBY help mitigate losses due to natural calamities, sustainable farming also depends on timely credit and access to financial planning.

This is where institutions like Agriwise play a crucial role. By offering need-based financing tailored to the agricultural sector, Agriwise empowers farmers to make confident decisions—from sowing to selling. With a strong focus on technology, transparency, and deep agricultural understanding, it supports farmers beyond just credit—promoting growth, stability, and resilience.

As farming continues to evolve in 2025, it’s essential for farmers to stay informed not only about crop insurance eligibility in India and the PMFBY application process, but also about financial tools that can complement insurance. Together, these resources enable farmers to manage risk effectively and invest in a more secure future.