Kissandhan sees huge FPO financing potential in Bengal

The outstanding book will be something like Rs 400-500 crore but it is growing at a rate of 30-40 per cent and in a few years, the loan book will grow multi-fold, Kissandhan Agri VP business head Pankaj Ajmani said.West Bengal also has a huge potential in this segment, he said.We have started our operation in Bengal recently and found there is a lack of awareness about the benefits of FPOs. We have tied up with four FPOs in Paschim and Purba Medinipur districts.

Multi-asset Agri finance company Kissandhan on Thursday said that the Farmers Producer Organisations (FPO) financing business will grow many-fold in India, including in West Bengal.

The Union government is promoting the formation and promotion of 10,000 new FPOs till 2027-28 with a total budgetary outlay of Rs 6,865 crore. ''Now FPO financing is at a nascent stage due to a lack of awareness. The outstanding book will be something like Rs 400-500 crore but it is growing at a rate of 30-40 per cent and in a few years, the loan book will grow multi-fold,” Kissandhan Agri VP & business head Pankaj Ajmani said.

West Bengal also has a huge potential in this segment, he said.

''We have started our operation in Bengal recently and found there is a lack of awareness about the benefits of FPOs. We have tied up with four FPOs in Paschim and Purba Medinipur districts. We will expand the number to 15 FPOs by the end of the year. We will add new districts like Bhardhaman, North and South Parganas in the second phase,” he said.

There are more than 15,000 registered FPOs but active ones will be around 1000, the official said. In West Bengal, there are 353 registered FPOs.

Speaking about the national plan, Ajmani said it was aiming to tie up with 100 FPOs that will impact the livelihoods of 75,000 to 1 lakh smallholder farmers by the end of the current financial year. Presently, the company has more than 48 FPOs across the country associated with it and impacting the livelihoods of 47,000 small farmers.

Kissandhan and similar non-banking financiers offer short-term credit for procuring inputs and purchase of produce from the farmers. Nabard promoted Nabkisan is also active in this segment and has extended support to 550 FPOs across various states in the country with cumulative assistance of more than Rs 225 crore.

A senior Nabard official said that FPOs apart from short-term financing can also receive interest subvention benefits from the government on agri-infrastructure projects.

''Organised financing will help eliminate the high-cost local financing for the farmers. Farmers also reap the benefit of handholding from sowing to harvesting and also reap profits earned by the FPOs as they are shareholders,'' Ajmani said.