SLCM's Agri-financing arm Kissandhan achieves 130% growth in Q1 FY16

Delhi based Agri-logistics group Sohan Lal Commodity Management (SLCM) has achieved 130% growth in loan disbursements in the 1st quarter of FY15-16 through their agri-financing arm Kissandhan Agri Financial Services Pvt. Ltd. Kissandhan has added loan disbursement figure of Rs. 76 crore in Q1 FY16 against that of Rs 33 crore achieved in Q1 of FY14-15. Kissandhan's total disbursement stands at Rs 210 crore as on June 30, 2015. These loans have been disbursed against crop collateral agnostic to the borrower's balance sheet and have not incurred any defaults till date.

Agri-financing is one of the emerging verticals for expansion in agri-logistics sector. To complete the value chain, SLCM has pioneered with NBFC division - Kissandhan to cater to farm credit. To start with, the companies provide services to their existing clients and gradually expand to a separate vertical. SLCM terms this move as a logical step to provide one-stop solution to the consumer and offer a diversified services ranging from warehouse management, agri financing, collateral management & procurement. The Group has the first mover advantage in the sector & has set a road map for other players in the market.

On the achievement Mr. Sandeep Sabharwal, Group CEO, SLCM says, ""We have been the pioneers in the field of post harvest logistics & agri-financing in India. As a result, SLCM is reaping the benefits of tremendous growth potential & opportunities in this sector. Historically, in agr-financing, land / other valuables / balance sheets, etc. were considered as collateral to extend finance to farmers. However, SLCM with its unmatched capabilities to manage crops, has turned the tables by offering financing to farmers against their crop as collateral. The response has been overwhelming as we have disbursed loans worth Rs. 210 cr pan India since inception of Kissandhan in April 2014.

When a farmer avails a loan from Kissandhan, he does it with the intention that his crops will be protected during the stipulated period, and he will not have to go through distressed selling of his yield. The trust that the farmers have been showing is the real reward. If we analyze the growth trends that Kissandhan has been witnessing since inception, we are positive of touching a growth of 300% by the end of this fiscal."

Kissandhan, with a capital infusion of Rs 50 crores from parent company SLCM, is eyeing a three-fold growth in loans disbursement by the end of this fiscal. Ranging from the smallest ticket size of Rs 42 lakh and a high-end ticket of Rs 5 crores, the average ticket size has been about Rs 2.5 crores. Kissandhan has sanctioned and disbursed loans across India covering many states and large number of commodities including Pulses, Wheat, Chana, Castor seed, Barley, Rice, Mustard, Mentha, etc. and has handled 68 clients tilldate. The NBFC entity has disbursed loans through 44 warehouses in 14 locations and against 15 crops with zero NPAs.

Mr. Sabharwal further adds, "In the field of scientific warehousing, we have consistently proven our capabilities and have been recognized by various industry bodies at different platforms. Our in-house developed SOP "Agri Reach" has cut down the post harvest losses from 10% to 0.5% which has been vetted in a detailed study conducted by a leading industry chamber."

SLCM group has outlined the expansion for current fiscal and plans to foray into ASEAN and African regions where it intends to replicate its proven business model to improve agriculture growth with a robust supply chain management and warehousing services. SLCM has plans to penetrate African continent with the first foray into Malawi.

SLCM currently has operations in Myanmar where it is engaged in warehousing, collateral management and allied services through their wholly owned subsidiary SLCM Ltd.

SLCM has partnered with 10 leading banks & financial institutions for collateral management including the leading public & private sector bank in India. Out of these 10, 2 partnerships are with leading banks in Myanmar, that is, YOMA Bank and recently with C B Bank.

Through our tie ups in Myanmar, SLCM Ltd. has disbursed loans worth 680 Mn kyatts and has managed 100,000 sq feet of space, 15 different commodities with a throughput of approx. 4 million MT.

The group in India, in FY14-15, has achieved a remarkable turnover figure of more than Rs 1923 crore and eyes to reach a turnover of about Rs 2600 crore in the coming fiscal. Expecting a multi-fold growth, they have plans to expand the warehouse management network from current 750 to 1500 warehouses with presence in all the major states of India.

Source : Equity Bulls

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