In a recent development, IFMR Trust has signed a partnership agreement with National Spot Exchange Limited (NSEL). The alliance will create a seamless process for providing finance to farmers and traders against commodity warehouse receipts for the commodities deposited in NSEL approved warehouses. The pilot for this financing model will be launched shortly at Unjha, Gujarat. The alliance ceremony witnessed the presence of Mr. Anjani Sinha, MD and CEO, NSEL, Ms. Bindu Ananth, President, IFMR Trust, Ms. Sucharita Mukherjee, Senior VP, IFMR Trust and Ms. Kshama Fernandes VP, IFMR Trust.
Under the partnership, IFMR Trust will provide loans to farmers against agricultural commodities deposited in NSEL-approved warehouses, by way of warehouse receipts issued for these deposits. Such post-harvest financing will give farmers the option to wait out the usually low prices offered immediately after harvest, and sell at a later time, when prices tend to rise. It will also allow farmers to take advantage of changing market prices rather than being burdened by them. The loans backed by warehouse receipts will be pooled and repackaged into securities. IFMR Trust will structure, arrange and sell these commodity loan-backed securities in the capital market.
Speaking at the occasion, Mr. Anjani Sinha, MD & CEO, NSEL said, "The launch of the spot exchange will complete the canvas of commodity trading in India. This partnership empowers the farmer by providing a liquid market for agricultural commodities accompanied by access to finance. NSEL is poised to transform the rural economy by way of improving marketing efficiency for agricultural produce. We are contended to be associated with IFMR Trust and will provide maximum support for the project."
On this development Ms. Sucharita Mukherjee, Senior VP, IFMR Trust said, "We will unlock tremendous value for both farmers and investors through this partnership with NSEL. We expect this model to be replicated throughout the country in the coming years. The tie-up will enable small farmers across the country to get easy access to finance at very competitive rates.”
IFMR Trust will act as Professional Clearing Member (PCM) of the exchange. The disbursement and repayment of loans made by IFMR Trust will be made through NSEL's PCM system.
About IFMR Trust:
About IFMR Trust (www.ifmrtrust.co.in)
IFMR Trust is a private trust whose mission is to ensure that every individual and every enterprise has complete access to financial services. In pursuit of this, IFMR Trust is promoting four key ventures: IFMR Trust Holding Company which rolls out Kshetriya Gramin Financial Services (KGFS) companies for the distribution of financial services in remote rural India, IFMR Trust Advisory Services , an Asset Management Company that is launching its first equity fund, IFMR Trust's Network Enterprises Fund™ to address key gaps in rural supply chains, IFMR Trust Guarantee Company to provide smooth access to debt markets for asset originators that are relevant to rural, low-income households, through structuring, guarantees and market-making and IFMR Foundation, a not-for-profit company that focuses on bridging knowledge, practice and regulatory gaps.
About National Spot Exchange Limited:
National Spot Exchange Limited is a National level Institutionalized, Electronic, Transparent Spot Exchange, promoted by Financial Technologies (I) Ltd. (FTIL) and NAFED (National Agricultural Co-operative Marketing Federation of India Limited). NSEL is poised to transform the rural economy by way of improving marketing efficiency for agricultural produce. It is a state-of the-art organized and structured market place providing facilities for risk-free and hassle-free procurement and disposal of farm produce. It provides customized solutions to various problems faced by the farmers, traders, processors, exporters, importers, arbitrageurs, investors and the general masses relating to agricultural marketing, storage, warehouse receipt financing, etc.
