Jain Irrigation Systems Ltd. (JISL) has got regulatory approval from the Reserve Bank of India (RBI) to launch a non-banking finance company (NBFC). The NBFC will focus on the farm sector, and operate in rural and semi-urban areas.
According to a company statement, the NBFC, to be named Sustainable Agro-commercial Finance Ltd. (SAFL), will commence operations initially with Jain Irrigation, promoter entities and International Finance Corporation (IFC), a member of the World Bank Group, as equity shareholders. . SAFL will be a non-deposit taking NBFC.
SAFL will provide agri-loans and offer a wide range of financing options. The main products will include micro irrigation systems (MIS) financing, agri project financing, contract farming, small business loans, solar pumps and appliances farming.
JISL had decided to promote the NBFC “with an overall objective of serving the small farmer and rural constituencies in a more comprehensive manner,” the statement said.
Headquartered in Mumbai, SAFL will start activities in the post-monsoon period. It is in an advanced stage of setting up around 25 offices in Maharashtra by end-August, and plans to open another 15 offices in Maharashtra by December 2012. “Subsequently, in the second phase, offices will also be opened in the states of Karnataka, Andhra Pradesh, Tamil Nadu, Madhya Pradesh and Rajasthan. Phase-3 will cover offices in the remaining states. A pan-India presence through a network of around 150 offices is envisaged in 3-4 years,” the company said.
The company has also undertaken activities related to staff recruitment and setting up a customised IT infrastructure.
JISL is a leader in drip irrigation, and its products are aimed at the farmer community. The major portion of its business is related to MIS and plastic pipes. It reported revenues of Rs.3,791 crore and a net profit of Rs.269 crore in 2011-12.