Experts and even Niti Aayog call for higher institutional credit to farmers to protect them from usurious rates charged by money lenders. Is that inspired you to set up a separate NBFC – Origo Finance?
We are building blocks for the entire agri-ecosystem and farm credit is certainly a critical component. The government is also pitching for more private sector involvement and easy market access to farmers, as farm sector is passing through a crisis phase because of various reasons. We are planning to set up an NBFC to provide input finance to farmers. Apart from input finance, the company will provide credit for farms equipment and vehicle. We are starting this because it is perfectly aligned with our parent capabilities for warehouse management, procurement as well as entire agri value chain finance.
When would Origo Finance be operational?
The process is on and we will get the license from RBI shortly. We hope to operationalise it by October 2016 and by the time our retail entity Origo Farms will be also be fully operationalised with multi-states presence and high penetration. Origo is developing different building blocks towards an agriculture ecosystem where both the farmers and end consumers can benefit and all services they look for including finance are provided.
Whom are you targeting and what are the products being offered under Origo Finance?
Ours will be an agri-focused lending, so we will provide credit to farmers, FPOs and traders. Since we are already into warehousing, procurement and retail, our product portfolio will be broad based and include input, storage and machinery. To begin with in current fiscal, we will be providing credit to 60,000-70,000 farmers. In couple of years, we will be able to cover nearly 5 lakh farmers.
We have several ambitious plans to help farmers and consumers. When we started, what we wanted was to create Origo ecosystem around whole farm infrastructure and farm capabilities. What we did over the years was we successfully build those blocks – from warehousing, procurement to brand and now financing the whole chain. Beyond finance, within 6-8 months, we are launching an IT-driven platform – Origo Markets. It will be an electronic ecosystem where you can buy and sell everything electronically. Farmers will not have to go to anyone else to purchase or sell anything. Financing will be readily available on this electronic platform. I think this electronic platform will be a string around all individual building blocks of our agricultural ecosystem.
Given the present overall credit scenario, do you think, your financing would be secure?
There are divergent views regarding farm credit especially recovery part. We are trying to make our financing secure at NBFC and our parent capabilities levels. During last six years, we have identified right people especially farmers to deal with and have been spending adequate time and money to offer our services and products to right participants. That not only makes our products secure but unique as well.