Working Capital Loan

Working Capital loan is extended to Dairy Co-operatives (including Milk Unions / Federations / Producer Companies) to tide over its financial need when their capital is likely to get locked up in the form of inventory of milk products/ raw materials.

In order to support the dairy cooperatives to meet their working capital requirement, NDDB has introduced a New Working Capital Scheme i.e. ‘NDDB Working Capital Finance Scheme for Dairy Co-operatives’ with effect from 1st September 2017. The salient features of the scheme are given as below: 

1) Purpose

i) Purchase of conserved commodities to meet the demand for milk & milk Products

ii) Conversion of surplus milk into conserved commodities

iii) Maintaining the minimum stock level of conserved commodities for day to day operations throughout the year

2) Who can apply?

i) The Dairy Co-operatives registered under a State Co-operative Societies Act., having duly audited accounts for the previous financial year.

ii) The applicant should not have any outstanding dues to milk producers/member societies for more than one payment cycle at the time of application and should not be a defaulter in repayment of loans to NDDB/Bank/any other financial institution during last 3 years. 

3) Basis of Assessment

Under this scheme, NDDB shall sanction working capital facility to eligible applicant based on their operations in previous three years and estimates for the following year.

4) Quantum of Finance

The maximum sanctioned limit shall not exceed 80% of the peak working capital requirement of the applicant.  

5) Validity

The sanctioned limit will be valid for a period of maximum of 12 months. At the end of the tenure, the total loan outstanding along with interest accrued there on is to be repaid to NDDB, if the limit is not renewed. 

6) Rate of Interest

The rate of interest is 6.25% p.a. with effect from 1st November 2020 on floating basis.

The eligible applicant has to submit the application in prescribed format to NDDB for availing financial assistance under the said Working Capital Finance Scheme.