Farmer Producers Organization (FPO) incorporated/ registered under Part IXA of Companies Act or under Co-operative Societies Act of the concerned States and formed for the purpose of leveraging collectives through economies of scale in production and marketing of agricultural and allied sector. The main objective is to meet the credit requirements of the Farmer Producer Companies / Organizations in the form of term loans to create an asset and working capital loan to meet the recurring expenditure.

Purpose of Loan

  • Aggregation of Produce.
  • Collective Marketing.
  • Bulk Procurement of Farm Inputs.
  • Processing and Value Addition.
  • Farm Mechanisation and CHC.
  • Storage and office Infrastructure setup.
  • Specific contracts pertaining to procurements and marketing as a supply chain agent from governments/corporates and agencies.
  • Loan against warehouse receipts.
  • Other purposes such as administration and operational expenses.


FPOs are promoted and functioning under the different legal provisions mentioned below and are covered under various Guarantee schemes under the aegis of SFAC/NABARD/NCDC or any other government scheme from time to time.

Types of FPOs based on constitution:

  • Producer Company under section 581 (C) of Indian Companies Act, 1956, as amended in 2013.
  • Cooperative Societies Act/Autonomous or Mutually Aided Cooperative Societies Act of Respective states.
  • Multi State Cooperative Society Act, 2002.
  • Section 25 company of Indian Companies Act, 1956.
  • Societies Registered Under Societies Registration Act, 1860.
  • Public Trusts Registered Under Indian Trust Act, 1882.

Nature of Loan:

With HDFC Bank, FPO can avail Term Loan or Working Capital Loan for business expenses.

Loan Amount:

Maximum loan amount under financing per FPC/FPO is ₹200 lakhs
Credit Guarantee Coverage available from CGTMSE & NABSanrakshan for loan up to Rs. 2.00 Cr