Category: General

Agriculture is identified as one of the top beneficiaries in the priority sector lending mandate for banks by the Reserve Bank of India. According to this mandate, banks are required to encourage the growth of such sectors with adequate and timely credit. In Budget 2021, the Indian government raised the farm loan target to Rs 16.5 lakh crore for fiscal year 2022, compared to the Rs 15-lakh-crore target in the preceding year. However, banks face immense challenges in meeting their requirement of disbursing loans to small and marginalised farmers due to high perceived risk of default, non-digitisation of farmlands leading to increased cost of verification and unavailable credit histories. 

Dvara E-Registry’s Solution for Credit Underwriting: To help banks create a profitable agricultural portfolio, Dvara E-Registry offers a tailor-made analytics solution called KhetScore that helps banks make informed, data-backed credit underwriting decisions that ensures crop loans are issued to productive farmers (who may not get loans because of credit history), increasing the size and quality of the bank’s agricultural loan portfolio.

KhetScore is a farm analytics package that enables multidimensional assessment of land parcel productivity derived from independent data including land parcel specific satellite and weather data. Dvara E-Registry provides the analytics by leveraging multiple proprietary AI algorithms that use many years of historical data. The KhetScore Analytics Package offers season-wise data for various parameters that help banks assess the productivity and risks of a farmer’s agricultural activity. This helps make informed underwriting decisions.

The parameters considered are:

• Geo Referenced Plot Details to verify the existence and location of the plot
• Verification of geo referenced plot with government survey numbers in select states of India where plots have been digitised
• Land use classification to ensure that the plot is being used for agriculture using AI algorithms
• Historical land parcel level drought and flood occurrence
• Season wise assessment of plot productivity (sowing frequency), crop health, plant moisture, soil moisture, nutrition and mechanical damage
• A historical weather and temperature range analysis for the plot.
• An overall KhetScore that integrates this multi-dimensional analysis into a single score that ranges from 0 to 100 which can be used as an underwriting criterion. You can read more about how we generate the KhetScore here.

Using the KhetScore analytics package, a bank has clear independent alternate assessments of a farmer’s capacity to repay a loan and the appropriate size of the loan. This supplements traditional credit analysis and is especially important in the absence of credit histories for new to credit farmers.