ICICI Bank has announced that it will make use of satellite data, in combination with technologies from agri-tech and fin-tech firms, to offer advanced, remote credit assessment for extending loans to farmers. The technology will involve using advanced satellite imagery to assess farm lands in parameters such as land quality, location, irrigation and year-round crop patterns. This data set will be combined with demographic data as well as financial spending patterns from fin-tech companies, in a bid to increase maximum credit allocation for farmers with existing credit history, as well as introduce farmers new to the credit system with faster assessment and lesser hassle. All of this, ICICI Bank claims, will help them reduce the time taken for processing farmer loans down from 15 days to a “few” days.
Among the type of data that will be collected by ICICI Bank to extend loans to farmers include data and patterns of rainfall and average temperature at a particular location, soil moisture data assessed through satellite imagery and smart analytics driven by agri-tech firms, availability of surface level water for easy irrigation, extensive crop trends for a particular farmer’s farm lands including types of crops grown, duration between sowing and harvesting, as well as average quality and health of crop yields. Additional data that will be collected by ICICI Bank also include size and location of farm lands, and their proximity to warehouses and marketplaces for the farmers to sell their produce.
Talking about the initiative, Anup Bagchi, executive director of ICICI Bank, said in a statement, “We believe that usage of this technology will enhance accessibility to credit as new-to-credit farmers will have easy access to formal credit, as well as farmers with existing credit lines will be able to securely expand their eligibility. With encouraging response to our pilot project in over 500 villages, we will shortly cover over 63,000 villages in the country for lending with this technology.”
The technology, ICICI Bank claims, will help them introduce first time credit users into the system, and also increase the creditworthiness of farmers with existing credit history. It will also help reduce the time taken to process these loans, since the use of satellite technology combined with analytical all-round data will further help ICICI Bank executives to remotely assess farm details, and not travel to the farm lands physically. This can be particularly beneficial for times such as these, when despite considerable relaxation of rules, travel restrictions still persist in many areas due to the Covid-19 pandemic.
ICICI Bank has also claimed that it is the first bank in any sector (public or private) to use a combination of satellite imagery and advanced analytics in order to extend loans to farmers. It also claims to be among a few banks around the world to use this technology for agriculture sector loans.