BOB Financial and CreditAI Launch Co-Branded Unnati Credit Card for Farmers

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BOB Financial Solutions Limited (BFSL), a wholly owned subsidiary of Bank of Baroda (BoB), and CreditAI Fintech Pvt Ltd (CAI), a Singapore and Bengaluru-based farmer credit scanning and reporting company have launched Unnati- a co-branded credit card exclusively for farmers. The card was launched as a contactless offering on the Visa network, it said in a press release.

Characteristics

The Unnati credit card will allow farmers to have agricultural inputs on time and at any time during the crop cycle. Farmer Producer Organizations (FPOs) will further help farmers understand and take advantage of the benefits of this card.

Credit card will operate in a “closed-loop system” with an “end-use monitoring” function to enable and trace agricultural credit to its last mile.

CreditAI’s proprietary mobile app and input store management system will ensure that the end use of credit is primarily for the purchase of inputs from FPO-owned input sales stores.

The credit card is designed to allow farmers to use credit on a rotational basis to avoid delays in renewals. Initially a base credit limit will be provided and over time, once the farmer’s credit profile improves with more transactions and repayments, the limit can be increased based on the credit score the farmer’s personality and his real cropping needs.

To be launched first in Karnataka

The Unnati credit card, which will be first launched in Karnataka and later expanded to Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu and other states in India.

Speaking at the launch, CreditAI CEO Sangram Nayaka saidIndia’s agricultural sector is in a phase where it is ready to embrace innovations not only in the way cultivation is done using agricultural mechanization and automation or selling products online, but also in how farmers are now banking and accessing credit through digital platforms. The situation smallholders face is high interest loans which can be disastrous with just one bad loan causing them to lose their farm. On the other hand, lenders also have underwriting issues for this segment. This is the very reason why the penetration of digital lending has not accelerated as much as in urban segments. »

Speaking about the launch, Shailendra Singh, MD and CEO, BFSL said, “The Unnati co-branded credit card will provide seamless access to credit to farmers as required by their crop cycles. To ensure that farmers, many of whom will be new to digital or cashless credit, are protected from misuse of their credit card, Unnati will operate as a closed-loop program and the card can only be used for the agriculture-related inputs of the respective FPO. network. We also offered a very low interest rate, in case the farmer would not be able to repay the entire outstanding amount at once.

Sujai Raina, Vice President and Head of Business Development at Visa India, said Unnati The credit card will provide farmers with easy access to credit tailored to their needs and, by leveraging the Visa network, it will also provide them with a way to make transparent and secure payments.

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Posted: Wednesday March 9th 2022, 2:07 PM IST

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