rural distribution - 25 mar08

7/28/2019 Rural Distribution - 25 Mar08

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Rural Finance

March 25, 2008


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Agenda

Why Rural Agri?

Agri Credit Scenario

Product Suite

Synergies

Distribution Channels


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Agenda

Why Rural Agri?


Product Suite

Synergies



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4

2006-07

2005-06

Institutional Agri Credit (O/s)

2.051.55Pub. Sector Banks

0.520.37Pvt. Sector Banks

0.280.21Regional RuralBanks

0.020.02Urban Co-op Banks

0.980.92Rural Co-op Banks

0.050.03Microfinance &SHGs

3.903.10Total

Source: RBI Trend and progress of banking in India, 2006-

07,Publications

Rs. TnMarketshare

53%

13%

7%

1%

-

1%

25%

SCBs account for 65% and Co-op Banks 25% of total credit

Branches/Outlets

R - 18,112; SU -11,728

R 985; SU - 2,064

14,475

2500

164,814

7,453

107,497*

*State CBs 31, DCCBs 366, PACS - 106,384, Agri Coop & Devt. Banks - 716R Rural, SU Semi - Urban

R - 19,097SU -13,792


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Strong Growth in Agri Disbursements(SCBs)

Crop Loan

FarmMechanization

Minor Irrigation

AnimalHusbandry

Modernization &Land Dev

Others2

549.77

41.94

27.30

29.28

45.96

153.97

Total 848.22

760.62

48.64

41.86

30.97

74.88

252.58

1,209.56

1,053.50

105.57

86.63

73.41

114.86

309.97

1,743.94

2003-04 2004-05 2005-06Rs. Bn

1 Upto November 20072 Incl agri o/s of Pvt. Banks (adj for ICICI Farm Equip o/s)

Source: NABARD (excludes RIDF investments by Banks), Planning Commission

5

20.5% growth inAgricultural

disbursements tillNovember 2007

1.00

1.50

2.00

05-06 06-07 07-081

Total Agri

DisbursementsRs.Tn


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Agenda

Why Rural Agri?


Product Suite

Synergies



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Why Rural Agri?

Obligatory requirements

Financial InclusionState & district level monitoring committees

Business OpportunityAgri SME & CorporatesBC??

% FY08 FY09*

Direct Agri 13.5% Rs. 172.08 bn Rs. 190.00 bn

IndirectAgri

4.5% Rs. 57.36 bn Rs. 63.33 bn

Total Agri 18% Rs. 229.44 bn Rs. 253.33 bn

* Estimated

RMAGs Contribution to Direct Agritargets

Agri Classification


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Agenda

Why Rural Agri?


Product Suite

Synergies



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RMAG Products

Farmer Finance

Farm Equipment Finance

Commodity Based Finance

Agri Business ProductsAgri Small & Medium Enterprises

Agri Major Corporates

Business Correspondent

Jewel Loans

Microfinance


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Agenda

Why Rural Agri?


Product Suite

Synergies



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RMAG Channels

Branches

Warehouse Management Agents

Rural Marketing Agents

Microfinance Institutions

Business Correspondents

Vikas Sahyogis

Tractor Dealers


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Farmer

0.1 MnSmall Traders

3,500

Crop loan Farm Equipment Commodity Loan Cattle loan Land Development Housing loan Personal Loan

Term loan

Trade finance

Overdrafts

Non-fund credit

Warehouseconstruction

Working capital

Commodityfinance

Sectoral Programs Poultry, Rice,

Seed, Horti, etc

Standalone ratedfund & non-fundfacilities

Product Suite & Channels across ValueChain

12

Microbanking 3.0 Mn

Jewel Loans 0.1 Mn

Vikas Sahyogi: 200Tractor Dealers: 1,000

RMAs: 400 WMAs: 250 Direct Selling

MFIs & BCs: 117

Branches: 242

Rural Branches (135), Semi-urban Branches (255), CAT (300)

Warehousing

2,000

Processors

200


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Insurance

RMAG Universe

Landless SmallFarmers

MediumFarmers

Traders &Aggregators

AgriSME

AgriCorporate

MFI

VikasSahyogi/Tractor Dealer

RuralMketingAssociate

SalesManager

MicroCredit

Farmer & FarmEquipment

Finance

Agri SmallBusiness

Agri SME

Agri Major Corporate

Corporate Agri(agri liaison team

for CBG corp)

TargetSegment

Channels

RADM


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Agenda

Why Rural Agri?


Product Suite

Synergies



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Capitalising on the Channel Network

Win-Win Situation for all

ICICI Group - Cost efficiencydue to shared infra, customer

valueChannel Partners - Better profitability

Customers - One-stop shopfor financial needs

Profitability

Customer


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THANK YOU


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Direct Agri ClassificationFinance to farmers, SHGs & JLGs

Crop, Horticulture and PlantationsLand Development & purchase of agricultural landWRF < Rs.1 mnPre & Post Harvest activities including processing &transportationWC & TL for Agri and allied* activities

Repayment of loans of money lenders

Finance to Others (corporates, partnerships & institutions)Pre & Post harvest activities including transportationCrop, Horticulture, plantations and WRFWC & TL for agri and allied* activities

For the above :Loans up to Rs.10 mn are direct agriAbove Rs.10 mn - 1/3rd direct agri and balance 2/3rdindirect agri

* Dairy, Piggery, Poultry, Bee keeping, fishery etc.


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Indirect Agri Classification

Loans to a r th i a s , for extending credit to farmers for supply of

inputs and buying the output from the farmersLoans to dealers of drip irrigation/sprinkler, irrigationsystem/agricultural machinery & implements

Credit for purchase & distribution of fertilizers, pesticides, seeds

Loans to agro based processing units with investment in P&M upto Rs.100 mn

Loans for construction & running of storage facilities

Advances to Custom Service Units who maintains fleet of FE/CE &undertake work for farmers

Loans to NBFC, NCDC, MFI/NGO for onward lending to farmers

Finance for setting up Agriclinics & Agribusiness Centre

Back


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Contribution of RMAG to Direct AgriTargets*

Contribution %

3%

3%

3%4%

26%

FY08

4.00

5.25

4.006.00

40.00

Jewel Loan

Micro Loan

ACL + SALRWRF

Agri SME & AMC

13%

22%

20.00

35.00

CAG

Buyout

100%155.75RMAG Total

FY09

6.00

8.05

5.7014.45

49.00

30.00

40.25

207.35

Contribution %

3%

4%

3%7%

24%

14%

19%

100%

Back

* Estimated

9%

1%

14.50

2.00

Farm Equipment

Farmer Finance

12.00

1.90

6%

1%

16%25.00RAPG 40.00 19%


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Location Metros / Category A & B cities

Fund & Non-fund based

Key Customer Segment Agri Processors, Agri Corporates & Vendors

Business Opportunities

Agri SME & Corporates

SME: FY08 Rs. 37.00 Bn, FY09 Rs. 41.70 BnCorp: FY08 Rs. 73.00 Bn, FY09 Rs. 84.30 BNPortfolio

Parameterised lending to Agri SME in specificsectors such as Poultry, Rice, Seeds, Horti etc.

Fund & Non-fund facilities for Agri Corporates

Back


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Farmer Finance - Crop Finance

Finance for purchase of seeds, fertilizers, pesticidesetc.

Farmers with farm land holding

Vikas Sahyogis

Rs. 40,000; 6 months

Product

Customer

Channel

Ticket Size &Tenure


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Farmer Finance - Cattle Finance

Loans for purchase of milch cattle

Farmer with land holding

Vikas Sahyogis, Dairy cashentrapment

Rs. 25,000; 2-3 Years

Product

Customer

Channel

Ticket Size &Tenure


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Farm Equipment Finance

Finance for purchase of tractors & authorised trolleys

Mid-segment farmer (4+ acres farm holding)

Tractor Dealers

Rs. 320,000; 6 Years

Product

Customer

Channel

Ticket Size &Tenure

Back


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Commodity Based Finance

Post-harvest loans extended against pledge of harvested produce

Trader / aggregator in commodities. Also, farmers

Warehouse ManagementAgents

Product

Customer

Channel

Ticket Size &Tenure

Rs. 500,000; 6 months to 1year

Back


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Agri-Business Products

Overdrafts, TL

Traders & processors in agricultural inputs or commodities


Product

Customer

Channel

Ticket Size &Tenure

Rs. 4.0 Mn; 1-3 years

Back


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Agri Major Corporates

WC fund & non-fund, derivatives, IB and advisory

Large companies predominantly involved inagriculture - Dairy, Poultry, Seeds, Oil, Sugar &

Commodity companies

Relationship Managers

Product

Customer

Channel

Back
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Microfinance

Loans to the Bottom of the Pyramid

Mostly women who are artisans, farm laborers, smallvendors, etc.

MFIs

Product

Customer

Channel

Ticket Size &Tenure

Rs. 10,000; 1 year

Back


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Business Correspondent

Microsavings, Term deposits, Remittances

Underbanked & unbanked in rural areas and urbanslums

Business Correspondent,using biometric technology

Product

Customer

Channel

Deposit Size Rs. 400

Back


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Branches in Rural & Agri Hubs

LocationClusters with high agri-rural potential,Crop clusters, mandis

Processing hub for all channels & allbusiness, tap all rural-agri opportunities

Branch banking for farmers, tradersProcessing hub for business generated

from all other channels

Objective

Key Customer Segment All agri and rural customers


Decentralised processing hub for quick and efficient customer servicing

135 rural branches, 255 semi-urbanbranches

Existing Network


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Branches in Rural & Agri Hubs

Ahmednagar Branch Nagpur Mandi Branch

Crop BranchDelpandarva, District Hardoi,Uttar Pradesh

Back


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Location District HQ / taluk / village

Risk sharing partner sourcing businesson commission basis

Crop loans, cattle loansConsumption loans

Objective

Key Customer Segment Farmers


Repository of local, customer knowledge

Vikas Sahyogis

200 activeExisting Network


Back


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Sourcing business on commission basis

New & used tractors

Objective

Key Customer Segment Farmers


Tractor Dealers

1,000 ActiveExisting Network

Dealers of major corporates such asM & M, TAFE

Back


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Warehouse Management Agents



Objective

Key Customer Segment Traders, Processors, Farmers

250 ActiveExisting Numbers

Typically agri traders / processorswith m a n d i linkages

Commodity FinancingBusiness Opportunity

Back


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Sourcing business on commission basisObjective

Key Customer Segment Processors, traders, rural individuals

400 ActiveExisting Network

Individuals with rural / agri linkages,traders, businessmen

ACL, RWRF, Rural HousingBusiness Opportunity

Back


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Micro Finance Institutions (MFI) Branches

Location District / Taluks / Village

Example Spandana, Andhra Pradesh

Objective Facilitator for Banks micro loans

Key Customer Segment Poor (SEC - R4) Urban / Rural

Business Opportunities Agri & Non Agri loans

Platform to reach out to the rural poor

Existing Network 150 Active

Back


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Business Correspondents

Location District /Taluk / Villages

Providing banking access to unbanked / under banked areas

Savings / Deposits, RemittancesInvestments, Insurance

Example KAS Foundation (MFI) in Orissa

Objective

Key Customer Segment Farmers, Urban / Rural non-farmers


Access point for a wide range of financial services,including liabilities

Existing Network 64 partners, 88 branches, 350,000 customers

Average deposit size Rs. 400

rural distribution - 25 mar08

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