FINANCIAL VIABILITY:

The assessment of financial viability of poultry units should include reasonableness of cost of various items of the scheme. Cost benefits analysis of the scheme should be worked out over the scheme period to find out net income generation vis-à-vis servicing of the debt apart from the entrepreneur getting a fair amount of return on the investment. Subsidies available to small/marginal farmers, agricultural labourers, scheduled casts and scheduled tribes under various programmes should be taken into account while studying the financial viability of the scheme.

QUANTUM OF FINANCE/MARGIN:

The amount of finance will depend upon the type and size of the poultry unit and the fixed costs and the working capital requirement during the gestation period. Working capital for the first 6 to 7 months in case of layer farms, 2 to 2.5 months in case of broiler farms and normally 6 to 7 months for hatcheries should be capitalized and included in the project cost.

Margin:

For marginal/small farmers, agricultural labourers and scheduled castes/scheduled tribes and other weaker sections. Subsidy available from various sources to be treated as margin.

For others -15 to 25% depending upon the financial capability of the proponent and size of the project.

Type of facility/term:-

Term Loan – Annual review.

SECURITY:-

Demand Promissory Note(L-434),
Composite Agreement for Hypothecation(CHA-1/CHA-2),
Borrower’s loan application should clearly state the purpose for which the advance is sought and being an integral part of the documents, a copy of such application must be attached to the Agreement for Hypothecation.
L-515 declaration as to relationship with Director/Officials,
L-516 or Annex the clauses on non-diversion of funds and securitization enclosed to Br. Cir.No.97/186 dated 08.03.2004 with CH I/CHA-II/CHA-IV
Equitable or legal mortgage or deed of declaration of land/superstructure, as appropriate where the limit exceeds Rs.50000/- (legal mortgage of land is to be taken in form CHA-4),
Letter of Guarantee from a guarantor wherever considered necessary in the limit above Rs.50000/-.(CHA-3)

INSURANCE :

Comprehensive insurance of birds covering diseases to be obtained for poultry development under all government sponsored schemes, small and medium poultry farms having bird strength upto 10,000/-.

In respect of commercial farms and hatchery units having fully automated management system or environmentally controlled management, obtention of comprehensive insurance of birds covering diseases be waived, irrespective of its size.

Comprehensive insurance of poultry birds covering diseases may not be insisted upon in respect of large poultry farms and hatchery farms with strength of birds above 10,000, obtention of such insurance be left to the discretion of the borrower/s.

Obtention of regular fire and strikes, riots, civil commotion(SRCC) comprehensive insurance policy for poultry structure, hatchery building, other civil work, machinery, equipment, feed mill, stock of feeds, medicines, vehicles, etc. financed under poultry development schemes.

DISBURSEMENT:

The execution of the scheme should be planned in a phased manner. Disbursement should be in accordance with the progress made in execution of different items of the scheme. At every stage of disbursement, the progress of the work should be verified by conducting post-disbursement inspections. As far as possible the loan amount should be disbursed directly to the concerned contractor/dealer/supplier/agency against proper bills/receipt and statement of completion from the borrower.

REPAYMENT:

Layer Farms : Monthly instalments after a gestation period of 6-7 months after purchase of day old chicks.

Broiler Farms : Monthly or quarterly depending upon the size of the unit and income generation pattern after a gestation period of 3 months after purchase of day old chicks.

Hatchery Units: Monthly instalments to start 7 to 8 months after the first purchase of parent stock as day old chicks.