AR-Chapter 10 b.pdf

ANNEXE TO CHAPTER 10 PERFORMANCE OF NABARD SUBSIDIARIES IN FY2024 NABFINS NABFINS Limited (NABFINS) has achieved notable performance metrics in FY2024, with a...

ANNEXE TO CHAPTER 10 PERFORMANCE OF NABARD SUBSIDIARIES IN FY2024 NABFINS NABFINS Limited (NABFINS) has achieved notable performance metrics in FY2024, with a disbursement of ₹2,723 crore, reflecting a robust growth rate of 48% as compared to FY2023. As of 31 March 2024, the balance sheet size was ₹3,112.4 crore and loan outstanding was ₹3,050 crore. The Profit Before Tax (PBT) stands at ₹191.6 crore for FY2024. The company boasts an active borrower base exceeding 11 lakh. The gross non-performing assets (GNPA) of NABFINS stood at 2.1% at the end of 31 March 2024. The company expanded its outreach by opening 75 new direct lending branches during FY2024, bringing the total to 402. The geographical footprint of NABFINS expanded significantly with the commencement of operations in Uttar Pradesh, Goa, and Tripura, thereby extending its presence to 19 states. Since inception, NABFINS has extended its services to more than 28 lakh households with micro credit flow of over ₹13,966 crore at the lowest rate of interest among non-banking financial company–microfinance institutions (NBFC–MFIs). The company operates through two different business models, viz., business and development correspondent model and direct lending model. Additionally, to support other institutions’ effort to reach microfinance borrowers, the company also extends bulk loans under the institutional lending model. Currently, the company has 401 branches and 109 active business correspondent partners. Major initiatives in FY2024 Initiatives during FY2024 included opening three all-women branches in Kerala, Karnataka, Tamil Nadu; The geographical a pilot project to provide digital healthcare services to borrowers; and footprint of five projects for skill development of women borrowers with support from NABARD. NABFINS expanded significantly with the Recognition commencement NABFINS received the Data Excellence Award for data efficacy from CRIF High Mark, a leading of operations in credit information company. Uttar Pradesh, Government of Tamil Nadu extended its appreciation to NABFINS for corporate social Goa, and Tripura, responsibility (CSR)-related initiatives in Namakkal district, Tamil Nadu. As a part of CSR thereby extending its presence to 19 commitments, the company has sanctioned 11 projects worth ₹1.2 crore covering eight states states. across the nation. 150  ` ` ` Leveraging Finance for Growth ` Showcase A10.1: From vision to venture: NABFINS-backed entrepreneurs propel growth Sulochna Sao, from Chhattisgarh, has embarked on a remarkable entrepreneurial journey in the snack manufacturing sector. With NABFINS support channelled through the joint liability group (JLG) she was a member of, Sulochana steered her enterprise to noteworthy success. Through her unwavering commitment and industriousness, she has not only expanded her enterprise but also fostered local employment opportunities and stimulated economic growth. Sulochana Sao, a member of JLG from Raigarh, Chhattisgarh NABKISAN NABKISAN Finance Limited (NABKISAN), recorded a balance sheet size of ₹2,804.5 crore (under IGAAP),1 with a year-on-year increase of above 30%. The gross loan book outstanding of ₹2,585.7 crore showed a year-on-year growth of about 35%, while the total sanctions and disbursements exceeded the targets set by the Board, reaching ₹1,779 crore and ₹1,732 crore, respectively. As on 31 March 2024, NABKISAN has sanctioned 3,004 loans to farmer producers’ organisations (FPOs) to the tune of ₹779.9 crore. Cumulatively, 1.5 million farmers across 20 states and 3 Union Territories (UTs) have been impacted through NABKISAN. NABKISAN remains the leading NBFC lender to FPOs under the Government of India’s (GOI’s) Agri Infrastructure Financing (AIF) scheme. During the year, NABKISAN sanctioned 24 loans under AIF worth ₹4.9 crore, including the first drone project to one farmer producers’ company (FPC). With this, NABKISAN has cumulatively sanctioned 102 FPC loans under AIF amounting to ₹15.2 crore. During the year, NABKISAN supported three socially relevant CSR projects worth ₹93 lakh. As the implementation partner for three FPC financing schemes of the Government of Tamil As the Nadu, NABKISAN provided financial assistance to the tune of ₹15.5 crore to 143 FPCs during the implementation year. NABKISAN has also signed a memorandum of understanding (MoU) with the World Bank- partner for three assisted ‘Tamil Nadu Rural Transformation Project,’ Government of Tamil Nadu, for enabling credit FPC financing linkage to FPOs promoted and supported under the project. In addition to this, as the implementation schemes of the Government partner for the Odisha Credit Guarantee Scheme for FPOs, NABKISAN has extended credit guarantee of Tamil Nadu, coverage to 114 FPOs amounting to ₹9.2 crore. NABKISAN provided financial assistance To improve technology orientation of the agriculture sector, NABKISAN has signed an MoU with to the tune of Villgro Innovations Foundation to provide funding for start-ups incubated by them where Villgro ₹15.5 crore to shall provide de-risking capital up to 15%–25% of the loan value. In this context, NABKISAN has 143 FPCs during sanctioned two loans to agri start-ups to the tune of ₹2 crore. the year. 151  Annual Report 2023–2­4 NABKISAN is an Eligible Lending Institution (ELI) under GOI’s Credit Guarantee Scheme for FPO Financing managed by NABSanrakshan. Under the scheme, 619 FPCs were granted credit guarantees during the year amounting to ₹123.4 crore. NABSAMRUDDHI NABSAMRUDDHI Finance Limited (NSFL) witnessed record-breaking financial performance during FY2024 with a 60% year-on-year (YoY) growth in the balance sheet to ₹1,855 crore and assets under management to ₹1,804 crore, and a 39% YoY growth in profits after taxes to ₹49 crore, exceeding targets by 18%. The asset quality of the company improved, with GNPA as a percentage of loan outstanding reducing from 0.5% (as on 31 March 2023) to 0.14% (as on 31 March 2024) through collections and expansion in the loan book. The company managed its second successive year of ‘nil’ delinquencies. Disbursement towards focus segments was around 35% of total disbursement during the year. Cumulatively, around ₹350 crore of water, sanitation, and hygiene (WASH) loans were disbursed through 32 partners. Sanction during FY2024 amounted to ₹191 crore, chalking a YOY growth of 100%. NSFL has been able to reach out to more than 3 lakh ultimate beneficiaries in 25 states and 2 UTs cumulatively through NBFCs, NBFC-MFIs, and other institutional clients. Major initiatives in FY2024 Major initiatives of NSFL during FY2024 are as follows: NSFL organised a WASH Summit jointly with Water.org in September 2023 to bring together experts from the WASH and financial sectors to discuss the guidelines, opportunities, and challenges as well as environmental, social, and governance aspects of climate-ready WASH lending. Further, NSFL co-sponsored the Sa-Dhan National Conference on Inclusive Growth, held on 8 and 9 November 2023, and instituted a WASH finance panel session, which was the first of its kind. During the event, NSFL’s pioneering Climate Ready WASH funding programme was launched by Chairman, NABARD, Shaji K.V. The pilot programme is supported by special concessional refinance from NABARD and technical support from knowledge partners such as Sa-dhan, Water.org, and FINISH Mondial, among others. NSFL signed an MoU for collaborating with FINISH Mondial through Trust of People for promoting climate-resilient WASH lending. With grant support from NABARD, NSFL, in collaboration with Trust of People, has launched NSFL witnessed a Climate Ready WASH Awareness Campaign under its pilot programme for rural borrowers of record-breaking financial MFIs in climate vulnerable districts spread over 7 states, starting from 22 March 2024. performance Further, an MoU was also signed with Climate Policy Initiative on World Water Day to take during FY2024 with forward climate financing. a 60% YoY growth in During the year, NSFL supported three CSR projects amounting to ₹69.02 lakh for WASH the balance sheet segment and education and skill development. to ₹1,855 crore and assets under management to Recognition ₹1,804 crore, and a NSFL has emerged as an ecosystem builder in WASH funding, being the 39% YoY growth in profits after taxes largest wholesale debt provider for Sustainable Development Goal 6 among home-grown to ₹49 crore, NBFCs, exceeding targets largest wholesale debt funder for last-mile WASH, by 18%. pioneer in climate ready WASH funding, and 152  ` ` ` Leveraging Finance for Growth ` only home-grown wholesale debt provider covering all sectors (microfinance, micro-, small-, and medium-sized enterprises [MSMEs], and affordable/rural housing) and the entire risk rating spectra (including unrated NBFCs, non-profits, and trusts) under WASH. In recognition, NSFL was awarded the Sa-Dhan Water.org ‘Water and Sanitation Financing Award, 2023’ under the capital providers category for the second time in a row. Showcase A10.2: Micro loans, macro change Karmina Bibi, like many others in her community, previously lacked access to proper water, sanitation, and hygiene (WASH) facilities, leading to health risks and discomfort. When NABSAMRUDDHI gave a concessional loan to Grameen Shakti Microfinance, the first unrated entity in its WASH portfolio, the latter provided a loan to Karmina for building a new toilet. The toilet not only improved her family’s hygiene practices but also enhanced their overall well-being and dignity. Karmina Bibi, next to her newly constructed toilet NABCONS In FY2024, NABARD Consultancy Services Private Limited (NABCONS) witnessed an increase of 63% in its revenues over the previous year, reaching ₹231.8 crore. As the preferred consulting partner for both central and state governments, NABCONS actively contributes to flagship programmes, such as Jal Jeevan Mission and Atal Bhujal Yojana. In FY2024, NABCONS expanded its product offering by providing services under the engineering, procurement, and construction domains. NABCONS was awarded the project of construction of warehouses/silos/processing centres/common hiring centres at multiple primary agriculture cooperative societies under GOI’s World’s Largest Grain Storage Plan in Cooperative Sector. NABCONS successfully completed the construction of 11 warehouses in 11 states as a part of GOI’s vision of Sahakar se Samridhi (Cooperation for Prosperity) (Box A10.1). Other major NABCONS assignments in FY2024 included: Carbon credit framework for the small holder farmers in Goa and Karnataka In FY2024, NABCONS Project management consultants under Jal Jeevan Mission in Maharashtra and Karnataka expanded its Third Party Inspection Agency under Jal Jeevan Mission in Maharashtra, Rajasthan, and product offering by providing Madhya Pradesh services under Preparation of detailed project reports (DPRs) under Jal Jeevan Mission in 5 states, namely, the engineering, Rajasthan, West Bengal, Karnataka, Assam, and Odisha procurement, Preparation of DPR under Atal Mission for Rejuvenation and Urban Transformation 2.0 in and construction West Bengal domains. 153  Annual Report 2023–2­4 Box A10.1: NABCONS pilots the construction of warehouses under WLGSP The World’s Largest Grain Storage Plan (WLGSP) in the Cooperative Sector is an ambitious initiative launched by the Ministry of Cooperation, Government of India in May 2023. The goal of the plan is to address the shortage of grain storage facilities in the country and strengthen India’s food security. Under the plan, storage capacity of 700 lakh metric tonnes would be created over the next 5 years at an estimated cost of ₹1.25 lakh crore. By establishing storage facilities at the level of primary agricultural credit societies (PACS), the government aims for a decentralised storage network. To ensure time-bound and uniform implementation of the plan in a professional manner, Ministry of Cooperation entrusted NABCONS with constructing 11 warehouses/processing centres/custom hiring centres at 11 primary agriculture cooperative societies in 11 states, along with undertaking feasibility studies on site, preparation of detailed project reports, and providing project management consultancy. For implementation of the pilot, NABCONS collaborated with NABARD, National Cooperative Development Corporation, Food Corporation of India, Central Warehousing Corporation, and National Buildings Construction Corporation. With an expert team of in-house consultants and specialised partner agencies, NABCONS successfully completed the construction of 11 warehouses within the stipulated timeline and entered the engineering, procurement, and construction sector with this pioneering step. On 24 February 2024, the Prime Minister of India inaugurated these warehouses at Bharat Mandapam in New Delhi and dedicated these warehouses to the farmers of the country (Figure BA10.1). Figure BA10.1: PACS warehouses by state under WLGSP (capacity in metric tonne) 5. Uttarakhand Dehradun Bahuudeshiya Kisan Seva Sahkari Limited Capacity: 500 MT 6. Uttar Pradesh Mirzapur Kotwa Pandey Kisan Seva Sahakari Samiti 7. Assam Capacity: 1500 MT Kamrup 1. Rajasthan No 2 Pub Bongshor Shri Ganganagar G.P.S Limited Ghamoodwali Gram Sewa Capacity: 500 MT Sahkari Samiti Capacity: 250 MT 8. Tripura Gomati 2. Gujarat Khalipada PACS Ahmedabad Capacity: 250 MT The Chandranagar group Seva Sahakari Mandali Ltd. 9. Madhya Pradesh Capacity: 750 MT Balaghat Parasvada Samiti 3. Maharashtra Capacity: 500 MT Amravati Nepringali Vividh Karyakari 10. Telangana, Sahkari Seva Sanstha Ltd. Rajanna Siricilla Capacity: 3000 MT Gambhiraopet PACS Capacity: 500 MT 4. Karnataka Bidar Prathmik Krashi Pattin Sahakar Bank Niymit Ekamba, 11. Tamil Nadu, Bidar, Karnataka Theni Capacity: 1000 MT Silamarathupatti PACS Capacity: 1000 MT 154  ` ` ` Leveraging Finance for Growth ` Project design and management consultants for various infrastructure projects under Sanitation Water and Community Health (SWACH) project, Rajasthan Preparation of a strategic investment plan under the Raising and Accelerating MSME Productivity scheme in Uttar Pradesh Setting up a project management unit for monitoring, coordination, and assisting in implementation of Agri-Rural and Gangey Gram Rural Tourism Projects in Uttar Pradesh Establishment of an integrated agriculture data hub and digital farmer services platform for agriculture in Kerala under the Digital Agriculture Mission 2021–25 of the GOI End-to-end study of operations of the Warehousing Authority of India to review pain points in the growth of eNWR-based pledge financing2 Survey and investigation of Shahdara drain for rejuvenation and conservation under Namami Gangey Mission using soil biotechnology and nature-based treatment Monitoring and evaluation of works under Himachal Pradesh State Compensatory Afforestation Fund Management and Planning Authority which were carried out during FY2017–FY2021 Social impact assessment study of CSR programmes/activities completed in FY2021 undertaken by Satluj Jal Vidyut Nigam NABVENTURES NABVENTURES Fund-I (“the Fund”) is the maiden flagship fund of NABVENTURES Limited with a pooled corpus of ₹598 crore. NABARD, as an anchor investor, has committed ₹228 crore to the Fund, while NABVENTURES, as sponsor, has committed ₹25 crore. It is a sector-focused fund that invests in agri-tech, food-tech, agri/rural fintech, and rural tech businesses at an early to mid-stage. It drives transformation in these industries by providing strategic and operational insights, patient capital, and access to NABARD’s extensive network. For FY2024, the Fund has made fresh investment commitments of ₹62 crore. The Fund focused on supporting its portfolio start-ups through follow-on investments. The cumulative drawdown commitments called since inception until 31 March 2024 amount to ₹365.7 crore, representing 61% of the total corpus of ₹598 crore. The cumulative investment sanctioned since inception until 31 March 2024 amount to ₹320 crore, representing 60% of the deployable corpus. The investee companies have delivered the following outcomes to the agri and rural ecosystem: Jai Kisan has facilitated loans worth ₹3,000 crore in the food and agri-business value chain across 11 states. Krishitantra enabled rapid soil testing for over 1 lakh farmers, and the company is an approved partner for the digital soil health card scheme of the GOI. Vilcart linked 90,000+ rural kirana stores in 23,000 villages across 67 districts in four states through a technology platform. For FY2024, Unnati connected 17.2 lakh farmers through a network of 83,569 outlets in 181 districts for NABVENTURES farm inputs and output aggregation. has made fresh An app developed by Satyukt provides customised crop advisory for 80-plus crops covering an investment area of 4 lakh acres through 200 partners based on real-time satellite and weather forecasts; commitments of with technology used in 19 countries, including India. ₹62 crore. 155  Annual Report 2023–2­4 NABSANRAKSHAN NABSanrakshan Trustee Private Limited (NABSanrakshan), the youngest subsidiary of NABARD, was incorporated in November 2020 as a trustee company to manage credit guarantee funds to promote the flow of finance to desired sectors, thereby contributing towards sustainable and equitable agriculture and rural development. Currently, NABSanrakshan is managing two credit guarantee fund trusts: Credit Guarantee Fund Trust for Farmer Producers’ Organisations (FPO Trust) and Credit Guarantee Fund Trust for Animal Husbandry and Dairying (AHD Trust). In FY2024, the company focused on creating awareness of the scheme by conducting numerous capacity-building workshops at banks and regional offices, and onboarding ELIs thereby increasing the coverage of credit guarantee schemes. With the continuous support of GOI and NABARD, as on 31 March 2024, 94 ELIs, have been registered under the FPO Trust and 55 ELIs have been registered under the AHD Trust. As on 31 March 2024, a cumulative of 1,876 credit guarantees have been issued, providing a coverage of ₹337 crore for total loan amount of ₹401.4 crore availed by 1,479 FPOs having 13.7 lakh farmers across 23 states, resulting in a 138% growth in terms of guarantees issued. All the new credit guarantees have been issued through the Credit Guarantee Portal, resulting in seamless processing, thereby reducing turnaround time. The Credit Guarantee Scheme Guidelines under the FPO Trust have now been extended to include NBFCs (BBB and above). Under the AHD Trust, five credit guarantees have been issued covering a total loan size of ₹88.6 crore and guarantee cover of ₹22.2 crore, cumulatively. Traction under the AHD Trust was low because the Animal Husbandry Infrastructure Development Fund (AHIDF) was under implementation only till FY2023. Recently, the AHIDF Scheme has been extended till FY2026 and has also subsumed Dairy Processing Infrastructure Development Fund. Under the revised scheme, ELIs have been expanded to include National Cooperative Development Corporation, NABARD, and National Dairy Development Board. Credit guarantee benefits will now be extended to dairy cooperatives in addition to MSMEs. NABSanrakshan has been given in-principle approval to manage and implement the Partial Credit Guarantee Scheme for rubber, coffee, and cardamom plantations under the Kerala Climate Resilient Agri Value Chain Modernization Project with NABSanrakshan as the Trustee and Government of Kerala as the Settlor. This will be the first state credit guarantee fund under the management of NABSanrakshan. As on 31 March 2024, a cumulative of 1,876 Government of India has approved extension of Fisheries Infrastructure Development Fund to credit guarantees FY2026, wherein credit guarantee facility to the projects of entrepreneurs, individual farmers, and have been issued, providing a cooperatives from the existing credit guarantee fund of the Infrastructure Development Fund of coverage of the Department of Animal Husbandry and Dairying will also be provided through NABSanrakshan. ₹337 crore for total loan amount of ₹401.4 crore availed NABFOUNDATION by 1,479 FPOs NABFOUNDATION, as a catalyst for development, ventured into areas like livelihood generation, comprising 13.7 lakh sustainable agriculture and rural development, natural resource management, gender sensitisation, farmers across skill and capacity development, drinking water, health, education, sanitation, tourism, financial 23 states, resulting in a 138% growth in inclusion through digitisation, etc. During the year, NABFOUNDATION received sanction for terms of guarantees 31 projects with a total financial outlay of ₹18.3 crore from NABARD, subsidiaries of NABARD, and issued. other corporates. 156  ` ` ` Leveraging Finance for Growth ` The projects under implementation have directly benefited more than 1,000 rural families including 32 self-help groups (SHGs), 80 producer companies, 35 artisans, and more than 500 tribal families across 116 districts, including 18 aspirational districts, states in the north-east, and Union Territory of Ladakh. New projects taken up during the year are as follows: Digitalisation for Rural Empowerment in Agriculture Marketplace: The project aims at promoting digital transactions at mandis among farmers, traders, and intermediaries to streamline trading operations and make them hassle-free. This also helps promote financial literacy among these stakeholders. Click Rameswaram: The project is an attempt to improve the livelihood of local artisans, SHGs, and youth through the digital promotion of tourism. The project envisages geotagging of more than 1,000 points of interest in the area, creating QR codes and placing them in prominent locations, and creating a digital coffee table book for hosting on various websites. Productivity enhancement through improvement in animal healthcare and fodder quality: The project aims to create awareness in the local community regarding animal healthcare practices and disease prevention, livestock management, etc. Construction of school toilets: As a part of WASH initiative, a toilet block is being constructed at GHP School, Birur, Chikkamagaluru with CSR funds from NABFINS. This sanitation facility will not only provide clean and safe environment for the students and staff, but also help reduce the dropout rate of girl students. Empowering the transgender community through entrepreneurial support: The project aims at creating livelihood opportunities for the transgender community in Tirupur, Tamil Nadu. As part of the project, NABVENTURES is supporting a group of transgender persons to start a mobile bakery unit-cum-cafeteria. Strengthening educational facilities in Zilla Parishad School: The project aims to enhance the educational facilities at Z.P. Higher Primary School in Palghar, Maharashtra, catering to the needs of the tribal community. The school lacks basic infrastructure such as electricity, clean drinking water, proper sanitation, and digital learning resources. With the support of NABSanrakshan’s CSR initiative, the project will address these issues and create a conducive learning environment for the 135 students from poor tribal families. The projects under Yatri Eco-Sanitation and Hygiene in Dhanushkodi, Tamil Nadu: The project, jointly implementation funded by NABKISAN, NABFINS, and NABFOUNDATION, is an attempt to create clean and have directly environmentally sustainable sanitation facilities in the eco-fragile zone of Dhanushkodi. The benefited more project aims at creating livelihood opportunities for the SHGs through portable sanitation on than 1,000 rural a ‘pay and use’ basis. The project also includes a mobile cafeteria which will bring in additional families including 32 self-help income for the SHG members. groups (SHGs), Restoring Irrigation Tanks for Augmenting Surface Water and to sustain climate 80 producer resilience through people institutions (ReASSURE): The aim of the project is to build companies, social capital for promoting community ownership towards water commons and rehabilitating 35 artisans, and irrigation tank cascades and strengthening tank-based livelihood through promotion of water more than 500 users’ associations. The project also involves restoration of five irrigation tanks. tribal families Kuposhan Se Bachav: The project aims at fighting malnutrition in the backward region of across 116 districts, including Jashpur in Chhattisgarh. It encompasses medical health and awareness camps; distribution 18 aspirational of calcium, vitamin, iron, and other essential medicines; promotion of kitchen gardens; and districts, states in distribution of plants bearing nutrition-rich fruits and vegetables. the north-east, and School Soil Health Programme: A GOI programme aimed at creating awareness and Union Territory of inculcating interest in agriculture at a very young age, the project aims at installing Mini Soil Ladakh. 157  Annual Report 2023–2­4 Health Labs in 1,000 government schools across the country. Students will be trained on how to test soil on prescribed parameters. Farmers can get their soil tested in these labs as well. Ujjwal Bhavishya Ki Or: This project envisages the renovation of two government schools in Allahabad with the construction of toilets, hand wash area, repair of classrooms, electric fittings, kitchen area, midday meal hall, supply of water coolers, benches and fans in classrooms, etc. The project is fully funded by the Indian Oil Adani Gas Pvt. Ltd under their CSR obligations. In addition, projects like drinking water supply in tribal villages, information and communication technology lab for children with disabilities, school infrastructure development and ‘My Pad | My Right’ projects were taken up during FY2024. NOTES 1. IGAAP = Indian Generally Accepted Accounting Principles. 2. NWR = Negotiable Warehouse Receipts. 158