A commercial bank formulated a scheme for financing the development of irrigation. The same was advertised in the region. After hearing about the scheme few farmers in the district got together and formed companies to develop irrigation. Three companies applied for a loan varying from Rs.1 lakh to Rs.4 lakhs. Manager, Agricultural Finance Department of the bank was to appraise these loan applications. The focus is on how to appraise loans for irrigation purposes from the point of view of development.