State Bank of Hyderabad today signed an MoU with dairy products company Heritage Foods, under which it would offer loans for purchase of milch cattle by small farmers identified and supported by the latter.
The beneficiary farmers would get assured buyback of milk produced, and also technological and veterinary support, advice on feed and other inputs from Heritage.
The credit under this scheme is also eligible for a 25 per cent subsidy given by Nabard on loans up to Rs 5 lakh. For the public sector bank, the tie-up is part of a strategy to increase its presence in the rural and semi-urban areas of AP, where it has opened 100 new branches in the last one year, according to managing director Renu Challu.
She told the media that government and Nabard had also been insisting on increasing investment credit, in addition to crop loans, to the agriculture sector. “We expect this collaboration to increase the flow of such credit to the agriculture sector,” she said. The bank’s agriculture loan portfolio is worth Rs 12,000 crore.
Heritage Foods president M Sambasiva Rao said the company had an installed capacity of 1.3 million litre per day, while its current utilisation was 900,000 litre per day. The partnership with SBH would help it increase procurement of milk to utilise the rest of the capacity.