New Delhi: The buffalo could well be ICICI bank's vehicle to leadership in rural lending.
The bank that has become the leader in retail banking, expects to do a repeat by providing loans for non-farming activities in rural areas.
In it's latest and one of the most unique initiatives, the raging bull of the banking sector has financed six lakh buffaloes to set in place a supply chain infrastructure for milk distribution.
"We have financed over 6 lakh buffaloes. They are all right now taking open grazing. Cattle feed companies are vey eager to sell to them. Also, when 6 lakh cows and buffaloes are producing milk, who is going to supply this milk to cities. So, there is a whole supply chain infrastructure there," Nachiket Mor Executive Director, ICICI Bank says.
ICICI has made this venture to outdo banks like the State Bank of India and the Punjab National Bank who already have a head start and are the main market players.
The idea behind setting up such linkages is to not only lend but also to ensure that the borrowers have the means to repay the loans.
In order to fufill this goal, ICICI Bank is negotiating with eight companies that will supply inputs and infrastructure to farmers and also help market their produce.
Apart from loans for cattle and poultry purchases other unique initiatives involve lending to local artisans and financing private rural schools against the security of school fees.
"The non-agri portion of rural India is bigger than the agri portion. That's where we are hoping the next big growth numbers will come from," Mor says.
And those numbers can be reached only by cutting down the cost of lending, which ICICI Bank has done by roping in NGOs and self-help groups.
The banks want each of them to borrow more as well - from an average of Rs 10,000 now to Rs 25,000/household.
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