Rural Distribution - 25 Mar08
Transcript of Rural Distribution - 25 Mar08
-
7/28/2019 Rural Distribution - 25 Mar08
1/39
Rural Finance
March 25, 2008
-
7/28/2019 Rural Distribution - 25 Mar08
2/39
2
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
3/39
3
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
4/39
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
-
7/28/2019 Rural Distribution - 25 Mar08
5/39
5
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
-
7/28/2019 Rural Distribution - 25 Mar08
6/39
6
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
7/397
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
-
7/28/2019 Rural Distribution - 25 Mar08
8/398
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
9/399
RMAG Products
Farmer Finance
Farm Equipment Finance
Commodity Based Finance
Agri Business ProductsAgri Small & Medium Enterprises
Agri Major Corporates
Business Correspondent
Jewel Loans
Microfinance
-
7/28/2019 Rural Distribution - 25 Mar08
10/3910
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
11/3911
RMAG Channels
Branches
Warehouse Management Agents
Rural Marketing Agents
Microfinance Institutions
Business Correspondents
Vikas Sahyogis
Tractor Dealers
-
7/28/2019 Rural Distribution - 25 Mar08
12/3912
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
-
7/28/2019 Rural Distribution - 25 Mar08
13/3913
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
-
7/28/2019 Rural Distribution - 25 Mar08
14/3914
Agenda
Why Rural Agri?
Agri Credit Scenario
Product Suite
Synergies
Distribution Channels
-
7/28/2019 Rural Distribution - 25 Mar08
15/39
15
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
-
7/28/2019 Rural Distribution - 25 Mar08
16/39
16
THANK YOU
-
7/28/2019 Rural Distribution - 25 Mar08
17/39
17
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.
-
7/28/2019 Rural Distribution - 25 Mar08
18/39
18
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
-
7/28/2019 Rural Distribution - 25 Mar08
19/39
19
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%
-
7/28/2019 Rural Distribution - 25 Mar08
20/39
20
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
-
7/28/2019 Rural Distribution - 25 Mar08
21/39
21
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
-
7/28/2019 Rural Distribution - 25 Mar08
22/39
22
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
-
7/28/2019 Rural Distribution - 25 Mar08
23/39
-
7/28/2019 Rural Distribution - 25 Mar08
24/39
24
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
-
7/28/2019 Rural Distribution - 25 Mar08
25/39
-
7/28/2019 Rural Distribution - 25 Mar08
26/39
26
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
-
7/28/2019 Rural Distribution - 25 Mar08
27/39
27
Agri-Business Products
Overdrafts, TL
Traders & processors in agricultural inputs or commodities
Rural Marketing Agents
Product
Customer
Channel
Ticket Size &Tenure
Rs. 4.0 Mn; 1-3 years
Back
-
7/28/2019 Rural Distribution - 25 Mar08
28/39
-
7/28/2019 Rural Distribution - 25 Mar08
29/39
29
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
http://images.google.co.in/imgres?imgurl=http://www.boulderrail.org/history/gwr/coalpitnow.jpg&imgrefurl=http://www.boulderrail.org/history/gwr/sugar.html&h=450&w=600&sz=25&hl=en&start=17&tbnid=-2aTefOxiMwQYM:&tbnh=101&tbnw=135&prev=/images?q=sugar+mill+&gbv=2&svnum=10&hl=en&sa=G -
7/28/2019 Rural Distribution - 25 Mar08
30/39
30
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
-
7/28/2019 Rural Distribution - 25 Mar08
31/39
31
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
-
7/28/2019 Rural Distribution - 25 Mar08
32/39
32
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
Business Opportunities
Decentralised processing hub for quick and efficient customer servicing
135 rural branches, 255 semi-urbanbranches
Existing Network
-
7/28/2019 Rural Distribution - 25 Mar08
33/39
33
Branches in Rural & Agri Hubs
Ahmednagar Branch Nagpur Mandi Branch
Crop BranchDelpandarva, District Hardoi,Uttar Pradesh
Back
-
7/28/2019 Rural Distribution - 25 Mar08
34/39
34
Location District HQ / taluk / village
Risk sharing partner sourcing businesson commission basis
Crop loans, cattle loansConsumption loans
Objective
Key Customer Segment Farmers
Business Opportunities
Repository of local, customer knowledge
Vikas Sahyogis
200 activeExisting Network
Risk sharing partner sourcing businesson commission basis
Back
-
7/28/2019 Rural Distribution - 25 Mar08
35/39
35
Location District HQ / taluk / village
Sourcing business on commission basis
New & used tractors
Objective
Key Customer Segment Farmers
Business Opportunities
Tractor Dealers
1,000 ActiveExisting Network
Dealers of major corporates such asM & M, TAFE
Back
-
7/28/2019 Rural Distribution - 25 Mar08
36/39
36
Warehouse Management Agents
Location District HQ / taluk / village
Risk sharing partner sourcing businesson commission basis
Objective
Key Customer Segment Traders, Processors, Farmers
250 ActiveExisting Numbers
Typically agri traders / processorswith m a n d i linkages
Commodity FinancingBusiness Opportunity
Back
-
7/28/2019 Rural Distribution - 25 Mar08
37/39
37
Rural Marketing Agents
Location District HQ / taluk / village
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
-
7/28/2019 Rural Distribution - 25 Mar08
38/39
38
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
-
7/28/2019 Rural Distribution - 25 Mar08
39/39
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
Business Opportunities
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