Through a digital approach, the State Bank of India (SBI) is looking to collaborate with few Agritechs to properly handle large volume and low-ticket loans in the agribusiness.
Agritech (agricultural technology) is seen as a channel for bringing in a new sector of clients by India's largest bank. A route for bettering decision-making, increasing top-line revenue, and increasing efficiency.
According to the bank's annual report, "The cooperation will also serve as an opportunity to minimize operational costs, credit costs, increase profitability, and user experience as digital transformation will no longer be an option but a must for structural change in the digital ecosystem."
The bank hopes to develop relationships with Agritechs that have a unique business model that will aid in the transformation of the agricultural supply chain, allowing farmers to increase their farm production prospects.
Artificial Intelligence (AI), Blockchain, IoT (Internet of Things), and Machine Learning-powered technologies will be used to accomplish this. SBI disbursed Rs 1,98,268 crore in FY21, compared to a goal of Rs 1,74,468 crore.
“The only silver lining in such a bleak year is growth in agriculture and related businesses. Due to adequate and widespread south-west and northeast monsoon rainfall, acceptable reservoir levels, and better soil moisture, Agri Gross Value Added increased by 3.6 percent in FY2021”, according to the report.
Credit growth to Agri and Allied Activities rose to 12.3 percent in March 2021 (4.2 percent a year earlier), the highest since April 2017, according to data on sectoral bank credit deployment for March 2021.
