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UTI arm, CoOptions float JV to reach out to farming community

UTI arm, CoOptions float JV to reach out to farming community
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First Published: Fri, Jun 29 2007. 09 12 PM IST
Updated: Fri, Jun 29 2007. 09 12 PM IST
Hyderabad: UTI Technology Services Ltd (UTI-TSL), a wholly-owned associate company of the Unit Trust of India (UTI), and CoOptions Technologies Ltd, a Hyderabad-based company, have floated a joint venture to provide a universal technology platform that will enable financial services and commodity players to transact directly with farmers across the country.
Using each of the primary agriculture cooperative societies (PACS) — there are 95,000 across the country — as IT hubs, this public-private initiative proposes to offer the farming community an array of services under one roof. All the PACS would be connected through a nation-wide IT-enabled service delivery network and would enable the creation of the world’s largest rural farmer credit bureau covering 100 million farmers in the next 24-36 months.
The JV proposes to support farmers by offering multiple credit delivery channels both from cooperatives and commercial banks. It plans to offer multiple financial products in the form of insurance, mutual funds and deposits. The idea is to support the farmer by offering supply chain of fertilizers, seeds, pesticides and farm implements. And finally, these IT hubs would also act as markets for buying and selling of farm products.
UTI-TSL would have a 51% stake in the JV, while CoOptions would hold 49%. The paid-up equity, though nominal initially, is estimated to reach around Rs100 crore ($25 million) in the next 2-3 years.
Set up five years ago by the founder and joint director of Infosys, N.S. Raghavan, CoOptions has already demonstrated its strengths in rural computing. The company has established, on a pilot basis, IT-enabled service delivery hubs in 138 PACS spread across Nizamabad, Chittoor, West Godavari and Krishna districts in Andhra Pradesh. It also has eight delivery points in Karnataka.
Operational for the last four years, these PACS have had a positive impact in terms of business growth and increase in the number of borrowing members. The pilot covers some 300,000 farmers and offers Rs250 crore ($60 million) as agricultural credit a year. It has also created a database of 500,000 farmers, along with their credit histories.
As per the agreement, the JV will inherit these 138 PACS and have access to a world-class data centre at Mumbai with a disaster recovery centre at Hyderabad, connected on a dedicated 2mbps link. UTI-TSL has a data centre and a processing centre with world-class facilities in Navi Mumbai, and business continuity centre in Hyderabad.
”The JV targets a pan-India scale-up of about 50,000 PACS over the next three years,” said a person close to the development, on conditions of anonymity.
Stating that the JV has made the required investment plans to realize the scale-up plan, he said, “UTI-TSL has committed as much as Rs250 crore in the next 2-3 years toward this.”
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First Published: Fri, Jun 29 2007. 09 12 PM IST