Collateral managers start lending to intermediate agricultural players

These areas remained untapped so far due to lack of adequate collateral assets

Faced with falling volumes, especially in agricultural commodities, collateral managers empanelled with comexes have now moved beyond farmers and started financing intermediaries in the agri value chain through their NBFCs (non-banking financial companies). Banks have not tapped these areas of new businesses due to a lack of adequate collateral assets with the intermediaries.

Almost all collateral managers, including National Collateral Management Services Ltd (NCML), Sohan Lal Commodity Management (SCML) and Star Agri have floated NBFCs for financing to agri intermediaries with an estimated lending potential of around ~90,000 crore. These intermediaries include small traders, farmers’ organisations (FPOs), agri processing units, and