Now, an eye-in-the-sky to assess farmers’ credit risk profile

Satellite images of the farm lands have emerged the new tool for the financial institutions to assess the credit risk profiles of farmers.

CropIn, a Bengaluru-based farm technology start-up, has developed a tool Smart Risk based on Machine-Learning algorithm, that helps banks/FIs generate the plot risk score for farmers. The banks bring the farmer on to CropIn’s platform.

How it works

In addition to the farmer’s KYC information, other details such as geo co-ordinates — the latitude and longitudinal details of the plot for which the risk score has to be assessed — are taken.

CropIn, which buys the satellite imagery of the said land/plot from the foreign companies, uses the co-ordinates provided by the farmers to analyse and processes the data using its product.

“We provide the details to our customers on what the farmer grew on the land in the past three years, the crop size, yields and his potential earnings for the period — based on the average prevailing price then. All these inputs are fed into the bank’s core banking solution after which they will take a call on financing the farmer,” said Krishna Kumar, CEO, Crop In Technology Solutions.

Keeping a tab

“Post-sanction of the loan, we will also provide periodic data on what the farmer has grown and the crop health using the satellite imagery. The aim is to help the bank keep a tab on whether the disbursed loan is used by the farmer for the intended purpose or not,” Kumar said. “And when the crop approaches the maturing stage, the bank will get a trigger, which will help it get in touch with the farmer to initiate the repayment process. As a result, it will bring down the monitoring costs,” he added.

Clientele

CropIn, Kumar said, has been trialling its product with ICICI Bank, NAFA (the financing arm of Israeli firm irrigation solutions provider Netafim and Samunnati), an NBFC with a focus on farm-lending.

The use of satellite image to assess the risk profile is becoming an accepted practice now globally, Kumar said, adding that the company has also been offering its services to a financing firm in Africa.

“We have just started using CropIn’s services in Tamil Nadu on a trial basis, which helps us decide whether to lend or not,” Anil Kumar SG, Promoter and CEO of Sammunati Value Chain Finance. “The pricing for this satellite image-based risk profile assessment service is at ₹150 per acre, per farmer,” he said.

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