Title: Agri-business Financing-New Credit Products-New financing opportunities
1Agri-business Financing-New Credit Products-New
financing opportunities
- By Mr.R.Prabha,General Manager,Canara Bank
2Introduction
- Food production in India has been stagnating
since 2001-02. - It is time we started the next round of green
revolution - Agri Business and Agri Processing should drive
the second round of Green Revolution with
diversification of crop production. - Developed countries have converted their
agriculture into Agri Business. -
- India is in the threshold of transforming its
agriculture into Agri-business.
3Introductioncontd
- India is the second largest producer of fruits
and vegetables in the world. - It has a huge emerging domestic market with the
change of lifestyle of middleclass and high
potential for exports to developing as well as
developed world. - Agri Business to create job opportunities in
rural areas.
4Transformation of Agriculture into Agri Business
major issues
Policy Initiatives Technology Investment
5Financing opportunities in Agri Business
strength of Indian Banking
- Vast outreach - a Branch network of 68116 with
an average population per Bank Branch of
16000 - Rural 31958
- Semi Urban 15375
- Urban 11498
- Metropolitan 9285
- High domestic saving rate of 28.1 of GDP
- Deposits USD 400.77 billion (Rs.1753174 Crores)
- Advances USD 264.67 billion (Rs.1157807 Crores)
- Specialized Branches and experienced personnel
- Leverage the strength of banking for investing in
Agri Business/ - Agro Processing/Food Processing.
- Conversion rate adopted is 1 USD 1 INR
43.745
6Indian Agri- Business as an investment opportunity
- Corporates Both Indian and Multinational
identifying agro processing as an opportunity. - Scope for Joint ventures with global players.
- Investment by venture capitalists.
- Huge potential for infrastructure creation like
cold storages, chilling plants, market yards and
handling facilities.
7Financing opportunities for Commercial Banks
- Post harvest management
- 1/3rd of fruits and vegetables produced in the
country are wasted due to poor cold storage and
handling facilities. - Cold storages controlled atmosphere cold
storages for fruits and - vegetables.
- Milk chilling plants
- Refrigerated vehicles
- Creation of market yards and other infrastructure
- Financing quality testing and certifying agencies
- Labeling and Packaging industry
- Food parks with common facilities for storage,
effluent treatment etc.
8Post Harvest Management financing opportunities
- Finance against goods stored in warehouses in
association with Collateral Management Companies.
- Bill discounting facilities to agriculturists
against acceptance of Bill of Exchange by the
purchasing company. - Opportunities in price risk mitigation using
commodity derivatives.
9Agro Based Industries financing opportunities
Contract farming Sugar cane Cotton
Broiler Poultry Seed Production Grapes
Vegetables Gherkins
10Agro Based Industries financing opportunities
- Project Financing
- Appraisal of Projects
- Syndication of Loans
- Long term Loans in local currency and foreign
currency for - buildings, machinery, technology with debt
equity ratio of 12 to 13. - Working capital facilities
- Export financing
- Term Loans for Upgradation of existing units to
adopt modern technology/HACCP / EUREP GAP
Standards
11Agro Based Industries financing opportunities
Some examples Meat and meat
products Marine exports Egg powder
Vineries Seed production Bio
Technology Fruits and vegetables
processing Food grain processing
Extraction of oleoresins Natural dyes
Extraction of aromatic compounds
12Agro based industries emerging opportunities
- Processing of vanilla for extraction of
vanillin - Conversion of sugar cane to ethanol
- Extraction of bio-diesel
13Agri Business - Other opportunities for banks
- Channel financing and financing modern retail
outlets - IT kiosks in rural areas
- Private Agri -extension initiatives
- Organic farming
- Consultancy for project formulation and appraisal
as a fee based activity
14TO SUM UP
- Transforming Agriculture into Agri-business and
value addition of agricultural products is a huge
opportunity for developing countries like India,
which has the potential to transform its business
landscape . - With low labour cost, varied climatic conditions
and diversity of crops, India has the potential
to emerge as the food processing centre of the
world. - There is a need to bring in world-class
technology and infrastructure in food processing
through a co-ordinated effort by the Government,
Corporates, entrepreneurs and the financial
institutions. - Banking Industry in India, particularly Canara
Bank as a major Bank in the Public Sector, is
committed to make this happen.
15Thank you