New Delhi: L&T Finance Limited (LTF), a subsidiary of L&T Finance Holdings Limited, has launched Warehouse Receipt Financing (WRF), a digitally enabled loan facility against agri-commodities.
“The warehouse receipt financing facility of LTF will be available in four states – Maharashtra, Madhya Pradesh, Rajasthan and Gujarat,” the company said in a statement.
WRF facilitates the use of commodities as collateral to secure loans. Commodities are stored in warehouses professionally managed by listed collateral managers.
“Under this arrangement, commodities are checked for quality and quantity, based on which receipts are issued by the collateral manager to the farmers, traders and processors. The receipt can be used as collateral for availing credit facilities from LTF.”
Currently, these facilities are offered by the market in a traditional manner which is mainly manual in nature and each loan application takes between 7 to 10 days to get approved. With the launch of this product, customers can get approval within 24 hours of filing a loan application and have all their loan related information at their fingertips through the mobile application Planet.
Farmers, traders and processors can avail this facility at attractive interest rates at the nearest LTF branch from 1 lakh 100 million. The company said the amount sanctioned would be based on eligibility check and credit margin limit, which would be between 25% to 30% of the market value of the commodity depending on the quality parameters.
Deenanath Dubhashi, Managing Director & CEO, L&T Finance Holdings Ltd. said, “The company WRF promises quick disbursement and flexible repayment with no foreclosure charges.
“The rabi sowing season in India has ended with a record 72 million hectares in this crop year, the highest in the last five years. In such a scenario, we hope that these loans will help our customers to meet their working capital requirements in a convenient manner. Additionally, it will also help in stabilizing the supply of commodities and prices in the market, improving income of producers and reducing food losses.”
Retail book of LTF reached 57,000 crore, up 34% year-on-year in the third quarter ended December, while the retail portfolio mix of the total loan book stood at 64%, led by key products such as rural trade finance and farm equipment finance.
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