Agri-logistics and services player National Collateral Management Services (NCML) entered agri and rural lending market by forming a non-banking lending subsidiary and said it will pump Rs 335 crore into it.
"We will start with offering loans against warehouse receipts kept in the custody of NCML to farmer producers' organisations and aggregators," NCML managing director and chief executive Sanjay Kaul said.
He said the borrowers will be able to get a higher loan to value ratio and lower interest rates of up to over 4 per cent of banks' base rates.
NCML acquired TG Finance, a non-operational NBFC promoted by a realtor at a premium of Rs 70 lakh to enter the business quickly, he said.
The board of the Fairfax India-promoted NCML has committed to infuse Rs 335 crore as capital into NCML Finance and the business will be starting up with an initial capital of Rs 100 crore, he added.
Kaul further said it is targeting to disburse Rs 350 crore in fiscal 2017 and take it up to Rs 1,500 crore going forward as more capital gets infused and the distribution network gets widened.
To start with, NCML will distribute loans through 80 of its locations and then scale it up, Kaul added.
Loan duration will be six-nine months and the average ticket size it is looking at is Rs 1 crore, he said, adding it will start with Rs 5 lakh.