Kissandhan – Changing the Agri Financing space

Kissandhan offer financing solutions irrespective to the financial statement of the borrower, the emphasis is on the agri collateral (the crop) that the borrower pledges and hence it takes away the distinction between the 'Have' and the 'Have nots' and brings in real financial inclusion.

With the launch of Kissandhan, we have become the first company in this sector to provide finance against farm products after arriving at valuation of the goods stored, using collateral at risk model. Kissandhan has sanctioned and disbursed loans across India covering many states and large number of commodities including Pulses, Wheat, Chana, Castor seed, Mustard, etc. The disbursement till date is done in more than 33 warehouses and has handled close to 5000 storage receipts amounts to about 130 crores in first year of its operations which clearly denotes success of the initiative.  

SLCM has tied-up with several private & government sector banks to help Indian farmers to complete post harvest activities and avail storage facilities for their produce. The tie-up for warehousing receipt financing and collateral management services has helped the farmers tremendously to get affordable post-harvest credit and fair price discovery of their produce.

SLCM leveraging its expertise in agri logistics domain has already started operations in Myanmar and looking for expansion to other African & ASEAN countries as well. The Group has the first mover advantage in the sector & has been leading the path for other players in the market.

The Group has been conferred with Emerging Warehousing Company Award by CPAI, Exemplary Position in Supply Chain & Logistics – Agri Warehousing Category by CII Scale, Global CSR Excellence & Leadership Award for Fair Trade & Supply Chain, and Emerging Brand for Rural Impact Award by CMO Asia, Innovative 100 Company by Inc India & CPAI Award for Excellence in Warehousing. And Mr. Sandeep Sabharwal – CEO SLCM Group was recognized amongst the Most Innovative CEOs by Inc India in Dec 2014.

The group is accredited as a preferred warehouse service provider by three exchanges including MCX, ACE & NMCE.

SLCM - Excellence in Agri Logistics Solutions

While the industry has laid emphasis on creating infrastructure; Sohan Lal Commodity Management (SLCM) has devised SOPs amalgamated with technology & agriculture domain expertise to store any kind of agricultural crop agnostic to infrastructure, location & weather pattern.   

This year, Government has also urged private players to innovate scientific warehouse management processes to reduce wastage during the post harvest stages. But, Groups like SLCM have already tested their processes where they have managed leased warehouses, agnostic to natural conditions and have drastically brought down the post harvest losses in the sector. SLCM stresses upon the importance of scientific post harvest warehousing practices wherein commodities can be stored irrespective of the warehouse & its condition.   

SLCM is an ISO 9001: 2008 & ISO 22000: 2005 Certified, leading post harvest Agri logistic warehouse services provider. Our warehouse management techniques are equipped with state-of-the-art technology to offer storage and protection services for the entire range of agriculture commodities. SLCM has been handling more than 157 agriculture commodities including Rice, Wheat, Maize, Mustard, Pulses, Cotton, Barley, Bajra, Castor Seeds, Spices, etc. across India & overseas. SLCM has recently forayed into cold storages and warehousing for organic produce as well & proved its efficiencies. 

We are the first company in the warehousing vertical that has applied for patenting this scientific technology of storage under aegis of “AGRI REACH”.

The Group offers Warehouse Management, Collateral Management services in India & Myanmar, Procurement & Agriculture financing solutions to Farmers, Joint Liability Groups, Individuals, Proprietary Firms, Partnership firms, SMEs, Importers, Exporters, Processors, Traders and all other agri intermediary.

With a vision to complete the supply chain in post harvest agri logistics, the group last year launched its NBFC - Kissandhan which revolutionized Agri credit by introducing Storage Receipt finance without any reference to the balance sheet of the borrower. SLCM took agriculture financing initiative for farmers by making a forward integration into warehouse receipt financing to augment the agriculture sector.

SLCM leveraging its expertise in agri logistics domain has already started operations in Myanmar and looking for expansion to other African & ASEAN countries as well. The Group has the changed the dynamics of Agri storage Myanmar with its proven expertise.

Cold Storage Industry Overview

The cold storage industry needs upliftment in terms of technology & warehousing practices as there have been 30% - 40% losses during the storage period in the horticulture sector, as per the data released by Ministry of Agriculture. The major difference between the dry good & the perishable is that the natural shelf life is few days or maximum to few months while in dry good it is few months or sometimes an year. 

The major loss that occurs in perishable commodities is caused due to bacteria or fungi. These micro-organisms usually consume small amount of food but damage the commodity to the point that it becomes unacceptable because of rotting or other defects. The loss also occurs during ripening, senescence, including wilting & termination of dormancy (e.g., sprouting) that increases the susceptibility of the commodity to mechanical damage or infection by pathogens. 

Another reason for loss in the commodity is consumption of food by rodents, birds, monkeys, etc. which contaminates or causes direct disappearance of the commodity. Sometimes, the level of contamination of commodity by the excreta, hair and feathers of animals and birds is so high that the food is condemned for human consumption. 

If the temperature is not maintained during the storage or excessive or insufficient heat or cold is exposed to the commodity, it can also spoil the commodity. It is integral to create conducive atmosphere during the storage time to prevent losses in perishables. 

All the above reasons need to be controlled specifically by keeping a minute-to-minute check on the commodity kept at the cold storage Delhi NCR. Regular audits & inspections need to be conducted regularly to keep a constant watch on the health of the commodity. There are several companies that have forayed into the market but none of them have been able to cut down the post harvest losses. But, there is one company which recently entered cold chain sector & has proven efficiencies to cut these losses through scientific warehousing. 

Till today, SLCM has managed 15 Cold Storages with a capacity of 151850 MT at diversified locations. There are no potato cold storages in Delhi, NCR but the density is more spread in the Agra region. SLCM cold storages are spread across Agra, Aligarh, Firozabad, Deesa, Mathutra & Bodinayakpur for horticulture produce like potato & cardamom. It has been noted that the losses in this sector are about 30%-40% & SLCM has proven its expertise to reduce these post harvest losses to 0.4% in this segment.

Check out the best financing facility for your agricultural business

If you are looking for some expert to guide you in planning your warehousing, then you must contact the leader in agriculture industry, so that the best service is with you and you will have to take no additional pressure for that. The different areas where you can get support from them are:

·         Commodity Storing- this is the service to arrange the best ware house to store your agricultural products. The farmers can store their harvested crops, where the traders can store their products and get the most of the farm. The pricing of the Agri logistic warehouse is also the lowest and thus is easy for you to carry out the entire function. Most importantly, you can get the support at the nearest destination from your farm. Thus the additional cost for transportation will also be saved.

·         Financing- It is the sector to get Warehouse Receipt Financing for harvesting or for starting a trade. The support for starting and agro based trade is problematic to be arranged. With the support of these farms, it has been easier for you to make the business. 

·         Management- managing the affiliated areas like arranging the taxes, and arranging the fees for the workers and for the other people associated with the trade or production is surely hazardous for you, when you manage them after doing all the hard work. A support from Global warehousing service provider for managing them will help you in your trade and the companies in this trade do exactly the same thing.

·         Procurement- Fixing the price and marketing the products is the most difficult task. You often feel the need of help in them and the Global warehousing service provider are thus ready to help you out. They will try to standardize the prices and the rates, so that you can get the best rate and your products are also sold in the market at the best rate.

Thus engage yourself more with the trade and leave the other affiliated matters in the hand of the leader in agriculture industry that are always ready for doing those.

Challenges faced by the Agriculture Sector

The major challenge faced by the agriculture sector is not just post agriculture services in India but also the lack of best warehousing practices which are not followed by several warehousing companies.

One of the warehousing companies has proven its efficiencies in the sector by adopting scientific technology for post harvest storage & crop protection in India. The name of the company is Sohan Lal Commodity Management Pvt. Ltd (SLCM). The company has initiated several world’s best practices in the warehousing sector.

SLCM constantly brings best practices to upgrade the processes in the warehousing domain. In the first year of its operation, SLCM brought "Bar Coded" storage receipts in practice that eliminated the risk of Fraud in terms of fake storage receipts.

Another challenge in the sector is that there are several grades in each commodity which has to be maintained with different methodology. SLCM has dealt in about 160 commodities with different grades & the process is evolving. The company has 35 internal audits wherein any deviation from the standard operating process (SOP) can be immediately identified & corrective action is taken instantly. SLCM follows “Checker & Maker” policy to keep a check on each level like warehouse (WH) Managers are constantly monitored by our backend team who calls each WH manager 3 times a day to keep a check on the ground & a call sheet is maintained. Then, we have auditors who match the information by monthly & fortnightly audits. Further, these Auditors are closely monitored by our Internal Process Controller with supporting pictures of each warehouse which are monitored on REAL TIME basis. We provide regular trainings to WH Managers for constant mentoring that helps them to identify issues that lead to deterioration of crops thus ensuring health of the commodity. The company has been well recognized by its valued clients to maintain the quantity & quality of the commodity.      

As on today, SLCM has managed a technology enabled network of more than 710 warehouses and 15 cold storages across 17 states with a total capacity of over 1.56 Million Metric Tonnes spread over 8.99 Million square feet area and a throughput of more than 240 Million Metric Tonnes.

The company has diversified its bouquet of services ranging from Warehouse Management, Agriculture Financing, Collateral Management to Procurement enabling one-stop solution to the end user which includes farmers, processors, joint liability groups, traders, etc.