The Federal Agricultural Marketing Authority (FAMA) is offering interest-free loans without collateral to graduates to encourage them to start agro-based businesses.

Its chairman Tan Sri Badruddin Amiruldin said the aid included capital funding of RM50,000 to start the business.

"The loans were first given out last year, but not many graduates applied. So now we are announcing it," he told reporters here Monday.

Badruddin added the payment period of five years for the loan would begin only after six months the business began.

"We are targeting 100 graduates each year, but only 50 were eligible last year," he said.

He said the government aimed at creating graduates who did well in agriculture just like those in Australia and Holland.