SBI to Partner with Agri-Tech Companies and Start-ups to Boost Agricultural Lending

State Bank of India (SBI), the country's largest bank, has announced its plans to collaborate with agri-tech companies and start-ups to provide lending solutions to the agriculture sector. In the bank's annual report for FY23, SBI Chairman Dinesh Khara highlighted the establishment of specialized branches dedicated to supporting start-ups in major cities such as Bengaluru, Mumbai, Delhi, and Chennai.

Chairman Khara expressed the bank's proactive approach in partnering with agri-techs and start-ups to address the financial requirements throughout the agricultural value chain. By leveraging the expertise and innovation of these companies, SBI aims to expand its services and cater to the evolving needs of the agriculture sector.

Traditionally, agricultural lending has been approached with caution due to factors such as weather uncertainties and risks like El Nino, a natural phenomenon that can lead to lower rainfall. However, several public and private sector banks have witnessed a surge in their agricultural loan portfolios. On average, banks have recorded a 17 percent year-on-year growth in this segment.

Canara Bank, for example, demonstrated a robust 21 percent growth in its agriculture portfolio during the quarter ended March 2023 compared to the same period in the previous year. The bank's agri-loan book increased from Rs 1.75 lakh crore in Q1 2022 to Rs 2.13 lakh crore by the end of Q1 2023.

Private sector banks have also made notable strides in agricultural lending. Kotak Mahindra Bank reported a 9 percent growth in customer assets within the agriculture sector, with the figure rising from Rs 26,128 crore in March 2022 to Rs 27,547 crore in March 2023. Likewise, Federal Bank's agri-loan portfolio increased from Rs 22,050 crore in March 2022 to Rs 23,355 crore in March 2023.

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In addition to SBI, other banks such as ICICI Bank, Bank of Maharashtra, and Bank of Baroda have established dedicated branches and digital platforms to cater specifically to start-ups. These efforts aim to provide tailored financial services and support to entrepreneurial ventures.

Furthermore, several banks have introduced customized services and financial facilities to assist start-ups affected by the Silicon Valley Bank crisis.

The collaboration between SBI and agri-tech companies/start-ups reflects a strategic move to leverage innovation and technology for the benefit of the agriculture sector. By combining financial expertise with cutting-edge solutions, SBI aims to foster growth and meet the evolving demands of this crucial sector.

As SBI forges ahead with its agri-lending initiatives, it is anticipated that other financial institutions will follow suit, strengthening the ecosystem for agri-tech companies and start-ups, and ultimately bolstering the agricultural landscape in India.

source: moneycontrol

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