Under the revised framework, farmers availing loans from the Uttar Pradesh Cooperative Gramin Vikas Bank, also known as Land Development Banks (LDBs), will pay a maximum interest of 6%. Currently, such loans carry an interest rate of 11.50%. The state government will bear the remaining interest burden, easing repayment pressure on farmers.
The announcement was made during the inauguration of the Youth Cooperative Conference and UP Cooperative Expo-2025 at Indira Gandhi Pratishthan in Lucknow. Addressing the gathering, the Chief Minister said high interest rates had placed an undue financial strain on farmers, particularly small and marginal landholders, prompting the government to intervene.
Officials said the move targets the most vulnerable sections of the farming community. Of Uttar Pradesh’s estimated 2.86 crore farmers, around 78% are marginal farmers owning less than one hectare of land, while about 14% are small farmers with holdings of up to two hectares. Together, they account for nearly 92% of the state’s farming population.
The reduced interest rate is also expected to strengthen the cooperative banking system and improve credit flow in rural areas. Uttar Pradesh has one of the country’s largest cooperative networks, including district cooperative banks, PACS and Cooperative Gramin Vikas Banks, with over one crore small and marginal farmers linked to these institutions.
CM Yogi said cooperative banks in the state had undergone a turnaround since 2017, recalling that 16 district cooperative banks were earlier declared defaulters. He asserted that the institutions are now financially stable and actively supporting farmers’ welfare.
The expo, which will continue till December 31, showcases innovations and achievements in the cooperative sector. During the event, the Chief Minister also sanctioned loans to youth entrepreneurs, honoured beneficiaries of rural schemes and recognised high-performing cooperative banks and district officials.
The government believes the interest rate cut will help stabilise farm incomes and provide momentum to the rural economy.
