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Sheep Project Loan.
Sheep Project Loan.

Sheep Project Requirements for Loan

Sheep Project Requirements for Loan in India:

The following article details about sheep project requirements for loan in India.

Requirements of a Good sheep farming Project for NABARD Loan sanction:

Sheep Project Loan.
Sheep Project Loan.

A check list prepared by NABARD for formulation of sheep project development schemes is given in Annexure III. The scheme so formulated should be submitted to the nearest branch of bank. The bank’s officers can assist in preparation of the scheme or filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability.

A) Sheep Project Requirements for Loan –  Technical Feasibility – This would briefly include

(a)Nearness of the selected area to veterinary aid, breeding cover and wool collection center and the financing bank’s branch.

(b)Availability of good quality animals in nearby livestock markets. The distribution of sheep breeds in India are given in Annexure IV-a, while the wool production and quality in IV-b.

(c)Source of training facilities. The major institutions providing training in Sheep farming are given in Annexure V.

(d)Availability of good grazing ground / lands.

(e)Availability of green/dry fodder, concentrate feed, medicines etc.

(f)Availability of veterinary aid / breeding centers and marketing facilities near the scheme area.

B)  Sheep Project Requirements for Loan – Economic Viability – This would briefly include

(a)Unit Cost – The average cost of Sheep units for some of the States is given in Annexure VI.

b)Input cost for feeds and fodders, veterinary aid, insurance, shearing etc.

(c)Output costs i.e. sale price of animals, wool, penning etc.

(d)Income-expenditure statement and annual gross surplus.

(e)Cash flow analysis.

(f)Repayment schedule i.e. repayment of principal loan amount and interest.

Other documents such as loan application forms, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. The economics of sheep farming is given in Annexure VII.

6. Sheep Project Requirements for Loan – Sanction of Bank Loan and its Disbursement

After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in stages against creation of specific assets such as construction of sheds, purchase of equipments and animals. The end use of the loan is verified and constant follow-up is done by the bank.

  1. Lending Terms – General 7.1
  2. Unit cost
  3. Each regional office (R.O.) Of NABARD has constituted a State Level Unit Cost Committee under the chairmanship of RO-in-charge and with the members from developmental agencies, commercial banks and cooperative banks to review the unit cost of various investments once in six months. The same is circulated among the banks for their guidance.
  4. 7.2 Interest Rate for ultimate borrowers Banks are free to decide the rate of interest within the overall RBI guidelines. However for working out financial viabilility and bankability of the model project we have assumed the rate of interest as 12% p.a
  5. 7.3 Margin Money NABARD has defined the farmers into three different categories and where subsidy is not available the minimum down payment to be contributed by the beneficiaries are given in the following table.
 Sr.No.  Category of Farmer  Beneficiary’s Contribution
ASmall farmers5%
BMedium farmers10%
CLarge farmers15%
7.4 Security Security will be as per NABARD / RBI guidelines issued from time to time.7.5 Repayment Period of Loan Repayment period depends upon the gross surplus generated. The loans will be repaid in suitable half yearly / annual installments usually within a period of about 5-6 years with a grace period of one year.
  1.  Sheep Project Requirements for Loan- Package of Common Management Practices Recommended for Sheep Farmers 
  2. Modern and well established scientific principles, practices and skills should be used to obtain maximum economic benefits from sheep farming. Some of the major norms and recommended practices are given here under
  3. 8.1. Selection and purchase of Animal
  4. i) It is necessary to select suitable improved breed of sheep available in particular area.ii)Crossbred sheep are available for purchase from state Government / Government of India sheep breeding farms.iii) Ewes can be purchased in regular sheep markets or from breeders in villages, while male sheep (rams) of exotic / crossbred from Government farms.iv) A purchase committee, consisting of the borrower, the financing bank’s representative and a veterinary assistant surgeon may be constituted or else cash payments could be done to borrower to select his own animals.v) It is desirable to purchase healthy animals of 12-18 months of age.vi) A certificate regarding age and health of sheep is obtained from the veterinary assistant surgeon.vii)The animals purchased have to be identified by fixing ear tags.viii) Sheep should be vaccinated for important diseases like sheep-fox and entero-toxaemia.ix) The price of sheep depends on breed, age and health status. x) An entrepreneur should have a unit of 20-30 ewes and one ram.

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