Jain Irrigation gets RBI nod to launch agri NBFC

Jain Irrigation Systems has obtained regulatory approval from Reserve Bank of India to launch a new non-banking finance company (NBFC), which will focus on farm sector and operate in rural and semi-urban areas.

The NBFC, to be named Sustainable Agro-commercial Finance Ltd (SAFL), will commence as a joint venture with Jain Irrigation, promoter entities and IFC, a member of the World Bank Group, as equity shareholders. Some banks and financial institutions will join the equity shareholding at a later stage, the micro irrigation company said on Friday.

SAFL will be a non-deposit taking NBFC, it said.

Jain Irrigation shares rose over 5% post the announcement to touch a high of Rs 92.30 in morning trade on NSE. At 10:30 hrs the stock was up 4.3% at Rs 91.40.

SAFL will provide agri loans and the main products will include MIS financing, agri project financing, contract farming, small business loans, solar pumps and appliances financing etc.

Jain Irrigation said SAFL is in advanced stage of setting up around 25 offices in Maharashtra by August-end and another 15 offices are scheduled to be opened in the state by December.

In the second phase SAFL will open offices in Karnataka, Andhra Pradesh, Tamil Nadu, Gujarat, Madhya Pradesh and Rajasthan, while phase three will cover offices in other states.

"A pan India presence through a network of around 150 offices is envisaged in a period of 3-4 years," it said.