Federal Bank-Commodity Online Join Hands for Agri Commodity Financing

KOCHI:
Federal Bank Limited has partnered with India’s leading online data and information portal Commodity Online for the distribution of loans against warehouse receipts and collateral management services across the country.
Federal Bank on Monday signed an agreement with Commodity Online India Limited in this regard.
According to the agreement, Commodity Online will roll out an agri commodity financing platform through its flagship portal www.commodityonline.com where farmers and traders can track commodity markets and warehouses online and get financing for their commodities quickly.
Mohan K, Deputy General Manager (SME & Agri), Federal Bank said that the Bank’s partnership with Commodity Online enables it to aggressively get into the online space to provide financing for agri commodities with collateral management across India. “Today, less than 40% of traders in India have access to institutional credit. And barely 10-15% small and marginal farmers get access to finance. Loans against warehouse receipts were around Rs 5000 crores ten years back. Currently, banking institutions have lent around Rs 40000 crore against warehouse receipts,” he said.
Mohan pointed out that Federal Bank, with its country-wide network of branches and tie-ups with a dozen collateral management companies, is keen to step up the agri commodity financing business through commodityonline.com as it has huge potential in an agrarian country like India.
George Iype, Managing Director of Commodity Online said that the portal has rolled out an exclusive online platform wherein farmers and traders can track the spot market prices of all commodities live, check where warehouses are available and track research insights from each commodity market across India.
“Commodity financing has the potential to grow to a Rs 2 lakh crore business by 2025 in India. Commodity Online is focused on providing various easy financing solutions online through its partnership with Federal Bank,” Iype said. He further added that as Internet penetration increases, online platforms like Commodity
Online will reach further into rural areas from where more business will get generated.
“Those wanting to get agri loans with collateral management facilities can register in commodityonline.com with their KYC details and get approval for the financing for a range of commodities very quickly,” Iype added.
The agreement signing ceremony was attended by Federal Bank Agri Business Chief Manager Santhosh M Paul and Commodity Online Director Giby Mathew and company secretary E P Madhusudhanan.
In 2007 a separate Warehousing Development and Regulatory Authority (WDRA) was established which introduced a negotiable warehouse receipt system. This opened up not only scientific warehousing techniques in India but also enabled commodity owners to take advantage of their produce as collaterals for finance.
From a meagre 5000 crore financing in early 2000, the business is expected to grow at least 20 times in the coming 3 years.