Jain Irrigation ropes in IFC for NBFC venture
06 July 2012
Jain Irrigation Systems Ltd has roped in International Finance Corporation (IFC) for setting up Sustainable Agro-commercial Finance Ltd' (SAFL), a non-banking finance company that would undertake financing of farms and farmers in the rural and semi-rural areas.
Jain Irrigation, a leading drip and micro irrigation company, has obtained regulatory approval from the Reserve Bank of India (RBI) to launch a non-banking finance company, which will focus on farm sector and operate in rural and semi-urban areas.
IFC, the commercial lending arm of the World Bank Group, will invest $5 million for a stake in the NBFC.
SAFL will commence as a joint venture with Jain Irrigation as the promoter and IFC as equity shareholder. Some banks and financial institutions are also expected to acquire equity in it at a later stage, the company said in a release.
The NBFC will finance purchase of micro irrigation systems, solar pumps and appliances etc while also providing loans to small businesses contract farming ventures.
''The project is intended to create a viable player in the rural financing space with support from an established industrial player that has significant rural presence,'' says IFC.