Inditrade, a leading player in the agri-commodity financing business, is a well known financial services provider in southern India. Incorporated in 1994, Inditrade recently launched its micro finance arm and is in the process of acquiring Varam Capital, a microfinance company that caters towards economic empowerment of households at base of the pyramid.
Replying to Yash Ved of Newsbarons, Sudip Bandyopadhyay, Group Chairman, Inditrade group informed “Inditrade Microfinance Ltd plans to create a loan book of approximately INR 100 crore by the end of the current fiscal.”
NB: What are your plans to scale up operations in commodity financing and microfinance?
Sudip: The company, which finances non-essential commodities traded in exchanges, has operations spread over northern, western and southern regions with strong presence in southern India. The company is the leading lender for traders in south-based commodities like rubber, pepper and cardamom.
Supporting the vision of the Government on Digital India, the company has also launched a completely digitized process. This is the first time in the industry that a completely digitized loan disbursement and collection process will be implemented including client prospecting, eKYC, tracking GPS locations, credit check, decision to disburse loan, money transfer to bank accounts.
NB: Are you planning to expand into newer cities?
Sudip: Inditrade Capital also diversified into micro financing this year through its wholly owned subsidiary Inditrade Mircofinance Ltd. with operations in Maharashtra and Tamil Nadu. Instead of concentrating on rural areas like most other microfinance operators, the company believes that there are significant opportunities in the semi urban areas of the industrialized states for a focused micro finance player to provide service in an effective and efficient manner. It plans to open another ten branches by the end of this year across Chennai and Coimbatore districts respectively.
NB: What is your current loan book size and loan disbursal target for FY18?
Sudip: For agri-commodity financing, the company is looking at a target of INR 500 crore in the current year.
On the other hand, Inditrade Microfinance Ltd., plans to create a loan book of approximately INR 100 crore by the end of the current fiscal.
NB: What outlook do you see for microfinance industry?
Sudip: About 41% Indians rely on informal sources of borrowing. The demand for credit in the unorganised sector in the country is higher compared to the supply. Even after the proliferation of micro-finance institutions over the last couple of decades, the unmet demand continues to be significant. Inditrade wants to address this demand and help in organising and strengthening the market further.
NB: What is your target for the coming financial year?
Sudip: The company, which acquired the commodity trading division of Edelweiss last year, is looking at a more than threefold increase in its lending to commodity trading in the current financial year.
The company is aiming at a rapid increase in their loan portfolio in the next few years, banking on new initiatives such as e-warehouse receipt, which are likely to boost commodity exchange trading in the country. The company targets INR 1,500 crore next year and INR 3,000 crore in three years’ time
NB: Brief us about the acquisition of stake in Varam Capital?
Sudip: The Board of Directors of the Company at its meeting held on 27th November, 2017 has, decided to enter into a Non Binding Letter of Intent for acquisition of majority shareholding in Varam Capital Private Limited, an NBFC – MFI.