INNOVATIONS IN AGRICULTURAL SUPPLY CHAIN FINANCE
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INNOVATIONS IN AGRICULTURAL SUPPLY CHAIN FINANCE 17th March 2007. Presentation by Kishore Kumar N.S. Executive Vice President (Agriculture Business & Microfinance) HDFC Bank Ltd. KEY CONCERNS. Supply Chain output leakages and price inefficiency. Small and marginal farmers

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INNOVATIONS IN AGRICULTURAL SUPPLY CHAIN FINANCE 17th March 2007

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Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS IN AGRICULTURAL SUPPLY CHAIN FINANCE

17th March 2007

Presentation by

Kishore Kumar N.S.

Executive Vice President

(Agriculture Business & Microfinance)

HDFC Bank Ltd


Innovations in agricultural supply chain finance 17th march 2007

KEY CONCERNS

  • Supply Chain output leakages and price inefficiency.

  • Small and marginal farmers

  • Fragmentation of land

  • Dependence on traditional revenue streams.


Innovations in agricultural supply chain finance 17th march 2007

KEY REQUIREMENTS FOR EFFECTIVENESS OF SUPPLY CHAIN FINANCING

  • Scale of operation

  • Production flexibility

  • Assured input supplies

  • Strategic tie-ups

  • Quality control and traceability

  • Communication and transparency


Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS TO COUNTER / MITIGATE CONCERNS

  • Non-cash disbursals of crop loans - for direct input supplies from manufacturers of fertilisers, seeds, etc., as part of channel finance for Corporates.

  • Financing based on contracts through large retailers / processors / exporters.


Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS TO COUNTER / MITIGATE CONCERNS

Contd…

  • Huge scope in horticulture, where cold chain is extended by buyers

  • Formation of small / marginal farmers into SHGs to absorb microfinance, not merely from growing crops but for agri trade


Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS TO COUNTER / MITIGATE CONCERNS

Contd…

SUPPLY OF SERVICES

  • Financing agricultural extension

    From Source-Universities

    To User-Farmers


Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS TO COUNTER / MITIGATE CONCERNS

Contd…

EVOLVED FINANCING MODELS

Supply Chain asset backed

Cash flow financing

Farmer Credit Risk


Innovations in agricultural supply chain finance 17th march 2007

INNOVATIONS TO COUNTER / MITIGATE CONCERNS

Contd…

  • Financing ICT innovatives / delivery channels servicing farmers.

  • Integrated effort to rural “family” financing - one family, multiple enterprises, reducing dependence on farm income - intra family supply groups.


Innovations in agricultural supply chain finance 17th march 2007

SUCCESS STORIES

  • Agglomeration of tribals for microfinance in organic farming for exports.

  • Engagement of NGOs to coordinate groups of small farmers to identify crop surpluses, grade, store, transport and collect payments.


Innovations in agricultural supply chain finance 17th march 2007

SUCCESS STORIES

Contd…

  • Customised financing for Micro Dairy farming and logistics through corporate tie-ups.

  • Marketing linkage of sericulturists with weavers, backed by firm offtake by textile company.


Innovations in agricultural supply chain finance 17th march 2007

Thank You


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