Feasibility of institutional financing for dairy development

Abstract

A commercial bank had undertaken an Integrated Development Project for dairy development in collaboration with a dairy plant. The scheme envisaged the supply of bank finances to the farmers for the purchase of quality cattle and repayments through milk supply to the dairy. A sample of beneficiaries were contacted to find out the impact of bank finances on their income. Also the impact of the scheme on the dairy s milk supply and the viability of this scheme as a commercial proposition was analysed. The findings of the study indicate that commercial lending institutions could join hands with organized dairies to advance money for purchasing cattle; this process would benefit the farmers, the dairy plants, and the bank. The implementation of such schemes could go a long way in improving the incomes of small farmers and at the same time increasing the production of milk in the milk shed areas of organized dairies.