State Bank of India today signed an agreement with Jain Farm Fresh Foods, a subsidiary of Jain Irrigation Systems Ltd, to help farmers associated with the company avail loans against receivables due from the company.
"The product is pioneering as it provides credit to farmers to make investments in modern agricultural technologies like mechanisation, irrigation, resulting in higher productivity and subsequently higher farm income," Rajnish Kumar, Managing Director for National Banking at SBI, said in a statement.
The product will use Jain Farm Fresh's ecosystem data to digitally enable lending solutions to customers apart from providing quick and easy credit access to farmers, thereby reducing reliance on informal money lending channels.
The farmer financing against corporate's receivables product is an innovative product as SBI can now extend credit to all farmers associated with an anchor without relying on traditional financial sources of information.
Farmers' past performance data with the company will be used to assess eligibility and enable loan sanction.
SBI has developed a digital tool to facilitate centralised electronic sanctioning. It uses historical performance data and information from public domain to assess farmer's eligibility and credit worthiness to sanction the loan.
