Rabo India to focus on food processing

The agriculture finance oriented company would even consider investing in infrastructure if it amounted to improving the logistics with processing units, he said.

According to Harkirat Singh, financial advisor to the bank, the Indian banking system’s approach to agricultural finance hasbeen predominantly asset-based. "But we take a look at the cash flows of the business, track the cash flow chain to ensure that credit is secured."

Thirty per cent of the agricultural produce is wasted due to poor logistics, cold storage facilities and financing ability of the farmer, he said. India is relatively underdeveloped in these sectors and presents immense potential.

The country has the largest area under cultivation in the world yet its share of international trade in agricultural produce is a mere one per cent, Smits added. The company has already extended credit of upto Rs 100 crore and has targeted a loan portfolio of Rs 400 crore by end of 1999, Smits said.

Rabobank would soon be tapping the wholesale debt market for upto Rs 400 crore. The company has approached the Credit Rating and Information Services Ltd (Crisil) for a rating which is expected shortly and given the US $ 250 million guarantee from Rabobank International.