The Hindu Business Line : ICICI Bank thrust on post-harvest lending

IN a bid to make rural lending less risk prone, ICICI Bank has adopted innovative strategies focused on bringing together the supply-chain players and farmers to ensure better prices for agricultural produce.

The bankhas evolved a pilot project for apple farmers in Himachal Pradesh in which they were advised to set up integrated cold chain to reduce post-harvest wastages and realise better price for their crops. A similar plan would be implemented for the banana farmers of Maharashtra, whose raw consignments are largely sent to Delhi. The farmers have been asked to set up a ripening centre in Delhi so that the value-addition fetches more prices to farmers. In a presentation on `New Innovations', Ms Zarin Daruwala, Head, Agri-Bsusiness Group, Rural and Micro-Banking Group, said high transaction costs, low yield, recovery concerns and thin spread were key challenges of rural banking. However, using technology and strategic measures such as the Himachal experiment, banks could overcome the problems, she said.ICICI Bank has also entered into such arrangement in Tamil Nadu where the textile industry has to depend on other cotton-growing centres for its needs.

Banks normally focus on pre-harvest lending, which were beset with high risks, Ms Daruwala said. ICICI Bank has decided to focus on post-harvest lending by entering into suitable tie-ups with partners in the supply-chain linkages to ensure more effective assistance to farmers.

It has tied up with the Indian Institute of Technology (IIT)-Madras to develop a low-cost ATM to serve the typical needs of the rural sector. The ATM is likely to cost below Rs 1,00,000, Ms Daruwala said.

Using its technology base, the bank has introduced ATM-enabled electronic loan cards to farmers. The cards are pre-loaded with sanctioned loan amounts.

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