Punjab National Bank (PNB) has signed a memorandum of understanding (MoU) with Origo Commodities India Pvt Ltd, a post-harvest solutions and warehouse management services company, to provide financing via warehouse receipts issued by the latter. This will cater to the needs of the country’s small and medium enterprises as well as farmers. Financing will be provided against pledge of agricultural commodities.
PNB said the MoU had been signed on a pan-India basis, with a focus on the Southern region, to help the bank expand its reach. The partners expect to dole out ₹500 crore in the current year under the MoU.
“This initiative will help change the dynamics of commodity supply chains at the farmer level by creating an opportunity for farmers to fetch a higher price for their produce and protect them from the hassles of distress-selling. MSME financing will help create agriculture and allied infrastructure at the rural level,” said SS Bhatia, General Manager, MSME, PNB. The deal is likely to bolster PNB’s efforts to promote warehouse receipt financing.
Origo has presence in 16 States and manages about ₹8,500 crore in agri-commodity assets.
“This will be a major step towards enhancing liquidity opportunities in rural areas, help Origo reach wider and diversified markets and play a significant role in transforming rural supply chains from traditional and culture-based to advanced and business-based, with enhanced economic benefits to farmers,” said Mayank Dhanuka, Origo Commodities.