Agriculture-focused non-banking finance company (NBFC) Netafim Agricultural Financing Agency (NAFA) on Monday said it has raised $50 million through a mix of equity capital and external commercial borrowing from Israel based – Phoenix Group and Cogito Capital.
Funds raised will be utilized for business expansion, enhanced offerings, and to expand horizons in the agri-rural domain and to improve its margins as it intends to service the high-cost old debt and bring down the overall cost of funds, the company said in a statement.
Apart from Phoenix group and Cogito Capital, it recently raised $9.4 million of Tier I Capital from its parent, Netafim Singapore and offered exit to the initial equity partners Atmaram Properties & Granite Hill Fund as they had reached their investment horizon, it said.
According to Prabhat Chaturvedi, CEO, Netafim Agricultural Financing Agency Pvt. Ltd, there is a need for diversified credit schemes, along with adequate hand holding, to provide financial guidance to farmers on investing in agriculture and allied activities.
“Indian agriculture, in general, is characterized by low and uncertain returns as they are more prone to natural calamities and varied risks, resulting in constant demand for agri-financing support. The advent of intensive and climate-resilient agricultural technologies has further amplified the need for good financing schemes. Despite the presence of multiple financial mediums, there aren’t enough credit products catering to the niche demands of the farmers, leading to a huge credit gap,” he added.
The lender acquired NBFC license from RBI in 2013. NAFA has established its presence in eight states and disbursed total loans above ₹1000 crore to more than 10,000 customers.
The article was first published on livemint.com