Almost 70 percent of the population still relies on agriculture as the principle means of livelihood in the country, especially, in the rural strata. As a nation, we are the largest producer, consumer and exporter of spices and spice products and stand second in agricultural outputs.

But, post the slowdown of 2008, there has been a significant decline in the agri services in India. Gauging the importance and need of the hour, the government has laid down plans and taken initiatives to cater to the needs of the industry and promote the sector. To sustain development, ensuring institutional credit to farmers is of utmost importance, apart from promoting and increasing shelf life of the produce. Several schemes have also been announced time to time to encourage farmers and keep the flow of entire supply chain rolling.
The recent out of turn monsoon has offset the agriculture production adding to the woes of the farmers, especially the small farmers. It has further affected the asset quality of the agriculture credit due to the large chunks of crop that have been damaged. This has resulted in selling off the crop at short intervals at mandis and compromising the selling price of the agriculture commodities. Tackling the problem, the government has been requesting banks and NBFCs to ensure the credit allocation to the farmers and indeed perpetuated to increase lending to the cultivators.

Using crop as the Collateral

Although, through directives from RBI, banks are doing their bit, but the need of the hour is to help them to mitigate the risk of immediate selling in the market at a lower price. Mostly, warehouse receipt financing and collateral financing is not evolved to reach out to the small & marginal farmers. It does not give the farmers the benefit of using their crop as the collateral or is linked with the credit worthiness of the farmer, which makes the financial inclusion difficult. No wonder, many people are migrating from farming to other occupations.

Private companies like Sohan Lal Commodity Management (SLCM) have invented methods that help farmers avail a loan against their crop through their wholly owned subsidiary Kissandhan. This not only gives the farmers a supplementary source of income, but also provides them with the solution of crop storage till they are ready to sell off the production in the market. This reduces the risk of making losses on the crop sale and allows them to protect their harvest from natural calamities like El Nino. SLCM is the leader in agri logistics space by innovating methods of warehousing in the past few decades.

Kissandhan provides financing solutions against storage receipts for agri-commodities and has strengthened group’s presence across the supply chain. The company is a RBI regulated non-deposit taking, non-banking finance company (NBFC). The NBFC has sanctioned and disbursed loans across India covering many states and large number of commodities including Pulses, Wheat, Chana, Castor seed, Mustard etc. Kissandhan has handled commodities worth about 200 crores under many locations and commodities. The disbursement is done in more than 33 warehouses and has handled close to 5000 storage receipts.

The Group has the first mover advantage in the sector & has been leading the path for other players in the market which proves them the leader in agriculture industry.