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Mushroom farming is one of the most profitable agri-businesses in India, with low startup costs and high returns. But starting a mushroom farm still needs some investment for equipment, compost units, and temperature-controlled rooms. That’s where mushroom farming loan and subsidy schemes can give you the financial push you need. In this guide, we’ve listed the top 10 mushroom farming loans and subsidies in India, and how to apply for them in 2025.
Why Choose Mushroom Farming?
- Low Investment, High Profit: Start with ₹50,000 to ₹2 lakhs.
- Short Harvest Cycle: Mushrooms are ready in 25-30 days.
- Growing Demand: Rising use in hotels, restaurants, and homes.
- Government Support: Loans + up to 40% subsidies available.
Did You Know? India produces over 200,000 tonnes of mushrooms annually and ranks among the top producers globally.
Top 10 Mushroom Farming Loans in India
| Bank/Agency | Loan Name | Loan Amount | Interest Rate | Repayment Period | Collateral Required |
|---|---|---|---|---|---|
| NABARD | Agri-Business Loan | ₹50,000 – ₹10 Lakhs | 8% – 10% approx. | Up to 7 years | May vary |
| State Bank of India | Agri Business Loan | ₹25,000 onwards | 7.5% – 10.5% | 5–7 years | May be required |
| Punjab National Bank | PNB Krishi Rin Yojana | ₹20,000 onwards | Starts at 8.5% | 3–5 years | Optional |
| Canara Bank | Agriculture Term Loan | ₹50,000 – ₹5 Lakhs | 7% – 10% | Up to 7 years | Depends on amount |
| HDFC Bank | Agri Term Loan | ₹1 Lakh onwards | 9% – 12% | 3–5 years | Yes |
| Axis Bank | Agri Infrastructure Loan | ₹50,000 onwards | 9% – 11% | 5–7 years | Yes |
| Union Bank | Mushroom Cultivation Loan | ₹25,000 onwards | 8% – 10% | 3–5 years | May vary |
| ICICI Bank | Farm Development Loan | ₹1 Lakh onwards | 10% – 13% | Up to 7 years | Yes |
| Bank of Baroda | Agri Clinic Loan | ₹50,000 – ₹5 Lakhs | 7.5% – 10% | 5–7 years | Optional |
| MUDRA Loan (PMMY) | Shishu, Kishor, Tarun Loans | ₹50,000 – ₹10 Lakhs | 8% – 12% | Up to 5 years | No (up to ₹10L) |
Tip: If you’re a small farmer, start with the MUDRA Shishu Loan (up to ₹50,000), which requires no collateral.
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Government Subsidies for Mushroom Farming
Key Government Subsidy Programs:
| Scheme Name | Subsidy Amount | Eligibility | How to Apply |
|---|---|---|---|
| National Horticulture Board (NHB) | Up to 40% of project cost | Farmers, FPOs, NGOs | nhb.gov.in |
| MIDH (Mission for Integrated Development of Horticulture) | 35%-50% subsidy (based on area) | Individual farmers, SHGs | Via State Horticulture Dept. |
| Rashtriya Krishi Vikas Yojana (RKVY) | Varies by state | Young agri-entrepreneurs | Visit state agriculture dept. |
Note-Worthy: Women and SC/ST entrepreneurs may get additional 10% subsidy under NHB schemes.
How to Apply for Mushroom Farming Loan (Step-by-Step + Table)
Applying for a mushroom farming loan in India can be done online or offline through banks, government portals, or financial institutions. Below is a complete guide on the application process, along with a comparison table for different application methods.
Step-by-Step Guide to Apply for a Mushroom Farming Loan
| Step | Description |
|---|---|
| Step 1 | Choose the Right Loan Scheme Decide whether you want a loan from a bank, cooperative, or under a government scheme like MUDRA or NABARD. |
| Step 2 | Prepare a Project Report Include cost estimates, expected yield, profit margins, required space, and market strategy. This is crucial for approval. |
| Step 3 | Gather Required Documents Documents like ID proof, land/rental proof, and income certificates are needed. (Full list below.) |
| Step 4 | Visit the Bank or Apply Online Choose the appropriate platform (bank branch, website, or Common Service Center). |
| Step 5 | Submit the Application Fill out the loan form and attach your project plan and documents. |
| Step 6 | Verification Process The bank/authority will evaluate your application and may do a site inspection. |
| Step 7 | Loan Sanction & Disbursement If approved, the loan amount is credited to your bank account or disbursed in parts. |
ALSO READ | 10 Best Fish Farming Loan Schemes for Farmers in India
Documents Required for Application
| Document | Purpose |
|---|---|
| Aadhaar Card, PAN Card | Identity & Address Proof |
| Land Ownership or Lease Documents | Proof of farming space |
| Passport-size Photographs | Identification |
| Bank Passbook or Statement | Financial history |
| Income Certificate | Proof of income (optional but helpful) |
| Project Report | Essential for getting approval |
| Caste Certificate (SC/ST/OBC) | To avail of special category benefits |
| Business Registration (if any) | For startups or firms |
ALSO READ | 10 Unique Modern Agriculture Tools and Uses for 2025
Interest Rates and Repayment
| Loan Type | Interest Rate | Repayment Period |
|---|---|---|
| Bank Loans | 7% – 13% | 3 – 7 years |
| MUDRA Loans | 8% – 12% | Up to 5 years |
| NHB Subsidy | Not a loan (grant) | Not applicable |
Important: Try to pay EMIs on time to maintain a good CIBIL score for future expansions.
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Conclusion
Mushroom farming in India is not only a smart choice but a government-supported one. With various mushroom farming loan and subsidy schemes available, anyone from rural youth to agri-startups can take the leap. Start small, use the available subsidies, and scale up. With the right support and planning, your mushroom farm can grow into a highly profitable venture in just a few months.
Frequently Asked Questions (FAQs)
1. How much does it cost to start mushroom farming in India?
You can start a small unit with ₹50,000 to ₹1.5 lakh.
2. Which is the best loan for mushroom farming in India?
NABARD and MUDRA loans are the most popular due to low interest and support.
3. Do I need collateral to get a mushroom farming loan?
No, for loans under ₹10 lakh (like MUDRA), no collateral is needed.
4. What is the NHB subsidy for mushroom farming?
NHB offers up to 40% subsidy on the project cost.
5. How long does it take to repay the loan?
Repayment periods range from 3 to 7 years.
6. Can women farmers get extra benefits?
Yes, women and SC/STs may get 10% extra subsidy under many schemes.
7. Is a business plan necessary?
Yes, it’s mandatory for getting loans and subsidies.
8. Where can I apply for NHB subsidies?
Visit nhb.gov.in and follow the online application process.
9. What is the interest rate for mushroom farming loans?
Typically between 7% to 12%, depending on the bank and loan type.
10. Can I get both a loan and a subsidy together?
Yes, many banks approve loans, and the government gives you the subsidy separately after project setup.
