Agricultural marketing and warehousing company Origo Commodities India Pvt Ltd is mulling over to enter agricultural financing by starting a Non-Banking Financial Company (NBFC) early next year and Origo is expected to obtain an NBFC licence by December, 2016.
Besides, Hyderabad-based company Origo will lend as little as Rs35,000 to small and marginal farmers to a maximum of Rs2 crore for traders dealing with agricultural commodities.
For the task, the company has filed an application with Reserve Bank of India (RBI) to start an NBFC to lend to farmers, and traders focused on agriculture sector, Sunoor Kaul, director of at Origo said. Origo expects to obtain a licence from RBI for its NBFC, Origo Finance Pvt. Ltd, by December.
Origo, the parent company, which expects procurement value to increase from Rs180 crore in 2015-16 to Rs.450 crore in 2016-17, will pump in Rs35 crore into its NBFC arm in the first year.
The NBFC will remain a separate subsidiary within the parent company, which, apart from running 350 warehouses across the country, has recently ventured into selling staples and spices under Origo Farms brand.
Origo is already setting up a branch network in Maharashtra, Karnataka and Telangana, and is hiring staff (mostly from rural bank branches) for its branch network. “We are setting up branches close to where the villages are,” said an official of the company and added, “Origo Finance’s network to grow to 500-600 branches spread across 8-9 states in five years touching the lives of 750,000 farmers.”