AGRICULTURE / RURAL
Corporate & Institutional Relationship
SBI-linking Farmers & Corporate in agriculture
An arrangement between companies dealing in agri-commodities and groups of farmers to cultivate and supply the desired quality and quantity of farm produce for regular raw-material inflow to the former is called contract farming. Under this arrangement, generally, inputs are supplied by the company along with supervision related assistance to the farmer. Prices are determined before the advent of the cropping season and money is remitted to the farmers' account after harvest and crop procurement. By this, the company gets raw material in time and the cultivator gets assured market for his produce. Credit requirement of the farmer is provided by the bank, who gets assured repayment from the contracting company.
Value Chain Financing:
An agri-value chain is a chain of activities where various stakeholders contribute to add value at each stage of the chain so that the raw material, essentially a farm produce, transforms into a final consumable product. We provide credit support at every stage of the agri-value chain.
Warehouse Receipt Financing (Produce Marketing Loan):
The Bank finances against the warehouse receipts issued by accredited warehouses to facilitate farmers augment their resources in the post-harvest period, without being compelled to sell the farm produce at an unremunerative price, immediately after harvest. The term of loan is 6-12 months.
Financing Commodity Groups
Sometimes a certain commodity is grown by clusters of farmers in a geographical location. Aggregators/ processors of that crop promote these groups for sourcing their raw materials requirements at one place. We finance these groups of farmers either individually or through Joint Liability Groups (JLGs).
For more details, please contact us at nearest SBI Branch