Spandana, India’s second largest microfinance company has scaled up its Agri-family loans (Called Dharani, these loans are given to small, marginal and tenant farmers for agriculture purpose). It has disbursed more than Rs.500 crore to small and marginal farmers till the end of September 30, 2010. The loan product was introduced after successfully completing a 3 year pilot project which was run in Andhra Pradesh.
This year, Spandana has reduced the interest rates charged on these loans by 300 basis points to 21 per cent from 24 per cent it had charged in the previous year.This makes this loan product one of the lowest priced micro loans in the Indian Microfinance Sector. Spandana’s Managing Director Mrs. Padmaja Reddy says: “We are leveraging our existing network and passing on the benefits to our borrowers”. The Agri-family loan product has reached out to over 1.4 lakh households so far. Mrs. Padmaja Reddy, further added: “Instead of lending more to similar group loan customers, we are working towards providing custom made niche products to customers. This will help us expand the overall pie of the microfinance industry. We are reaching out to new customer sub segments from our existing branch network”.
The Agri-Family loan product was launched on a pilot basis in 2006 in two different locations namely Adilabad and Nizamabad region in the Telangana district of Andhra Pradesh. Under this loan, small and marginal farmers were offered flexible repayments based on their cash flows. During the pilot run, Spandana witnessed a hundred percent on time recovery. Spandana is planning to soon introduce the agri-family loan product in other states soon.