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L&T Finance starts agri-commodity warehouse receipt financing in four states

L&T Finance starts agri-commodity warehouse receipt financing in four states

L&T Finance starts agri-commodity warehouse receipt financing in four states

L&T Finance Limited (LTF), a non-banking finance company that is a subsidiary of L&T Finance Holdings Limited, has started a digitally-assisted loan facility against agri-commodities called warehouse receipt financing (WRF).

The company said in a statement that LTF’s warehouse receipt financing facility will be available in four states: Maharashtra, Madhya Pradesh, Rajasthan, and Gujarat.

The WRF makes it easier for goods to be used as security for loans. Warehouses where goods are kept are run by professionals called ‘collateral managers.’

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Under this arrangement, the quality and quantity of the goods are checked, and based on that, a receipt is given to the farmers, traders, and processors. The receipt can then be put up as security to get a loan from LTF.

At the moment, most of the WRF facilities on the market are done by hand, and it takes anywhere from 7 to 10 days for each loan application to be approved.

Quick approval

With the launch of LTF’s product, customers can get a loan approval within 24 hours of filling out a loan application and can access all information about their loans through the mobile application PLANET.

Farmers, traders, and processors can use this service at the LTF branch nearest them to borrow between ₹1 lakh and ₹10 crore at a good interest rate. The company said that the amount given will depend on the person’s eligibility and the loan margin range, which will be between 25% and 30% of the market value of the commodity based on quality parameters.

Dinanath Dubhashi, the Managing Director and CEO of L&T Finance Holdings Ltd, said that the company WRF promises quick disbursement, flexible repayment, and no foreclosure fees.

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‘The rabi sowing season in India is over, and 720 million hectares were planted, which is the most in the last five crop years. In a situation like this, we hope that these loans will make it easy for our customers to meet their working capital needs. It will also help stabilise the prices and supply of goods on the market, raise growers’ incomes, and cut down on food waste, Dubhashi said.

In the third quarter that ended on December 31, 2022, LTF’s retail book reached ₹57,000 crore, which was up 34% from the same time last year. The retail portfolio mix of the total loan book was 64%, led by key products like rural business finance and farm equipment finance, the company said.

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