Axis Bank finances farmers who have contract farming arrangements with Corporates. Under the Contract Farming arrangement, the farmers and the company enter into an agreement for the production and supply of agricultural products under forward agreements, frequently at predetermined prices.
The sponsor company, which has a contact farming arrangement with farmers, acts as a "Management and Collection" agent in the lending arrangement, an interface between the Bank and the farmers. It identifies the borrowers, does the documentation, disburses the loan to the farmers on behalf of the Bank and after procurement from farmers, routes the proceeds payable to farmers, to the Bank towards repayment of their loans. The company is paid a commission for the services rendered to the Bank.
Eligibility
Farmers having cultivable fertile land of 3 acres and above.
Loan Amount
As per the scale of finance, per acre of land, as decided by the District Level Credit Committee of the lead Bank; or what is mutually agreed upon by the Bank and the Sponsor Company, as the case may be.
Tenor
Duration of the crop plus 2 months.
Security
Hypothecation of the crop.
Corporate Guarantee /"Letter of comfort" from the Sponsor Company (in the absence of Corporate Guarantee).
Disbursement
The disbursement of loans will be effected to the credit of current account to be opened by the Sponsor Company with our Bank exclusively for the said purpose. The sponsor company will make the disbursement to the farmers and submit an acknowledgement receipt from the farmers as a token of having received the loan.
Repayment
After the supply is over, Sponsor Company shall send to the Bank the entire proceeds payable to the farmers. The bank will make balance payment to the farmers after deducting their crop loan dues.
For further information, please contact the nearest branch.
For further information, please contact the nearest branch.
