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L&T Finance Limited (LTF), a subsidiary of L&T Finance Holdings Limited, a non-banking finance company has launched warehouse receipt financing (WRF), a digitally-assisted loan facility against agri-commodities.
LTF’s warehouse receipt financing facility will be available in four States — Maharashtra, Madhya Pradesh, Rajasthan and Gujarat, the company said in a statement.
The WRF facilitates the use of commodities as collateral to secure loans. Commodities are stored in professionally managed warehouses by empanelled collateral managers.
Under this arrangement, commodities are checked for quality and quantity, based on which a receipt is issued by the collateral manager to farmers, traders and processors. The receipt can then be used as collateral to avail of loan facilities from LTF.
Currently, the WRF facilities offered by the market are primarily manual and take anywhere between 7-10 days for each loan application to get sanctioned.
Faster approval
With the launch of LTF’s product, customers can obtain a sanction within 24 hours of filing the loan application and have all the information related to their loans at their fingertips through the mobile application PLANET, the company said.
Farmers, traders, and processors can avail of this facility at the nearest LTF branch at attractive interest rates for an amount ranging between ₹1 lakh to ₹10 crore. The amount sanctioned will be based on eligibility checks and the loan margin range, which shall be between 25 per cent and 30 per cent of the market value of the commodity, based on quality parameters, the company said.
Dinanath Dubhashi, Managing Director & CEO of 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 acreage of 720 lakh hectares in this crop year, which is the highest in the past five years. In such a scenario, we are hopeful that these loans will help our customers meet their working capital requirements in a convenient manner. Additionally, it will also help stabilise the supply of commodities and prices in the market, improve growers’ income, and reduce food losses,” Dubhashi said.
LTF’s retail book has reached ₹57,000 crore, up 34 per cent year-on-year in the third quarter that ended December 31, 2022, while the retail portfolio mix of the total loan book stood at 64 per cent, led by key products like rural business finance and farm equipment finance, the company said.
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