ICICI Bank Deploys Satellite Data To Assess Agri Loans For Farmers
ICICI Bank is using readily available satellite images from ISRO and NASA to assess creditworthiness of farmers for agri loans.
In a first for banking in India, ICICI Bank Ltd. is deploying satellite data for agri loans assessment, a move it claims will reduce costs for both farmers and the lender.
India’s second largest private lender has been piloting the project in select few villages over the past two years and is now extending the same to 500 villages in Maharashtra, Madhya Pradesh and Gujarat. The bank is using readily available satellite images from Indian Space Research Organisation and the U.S.’s National Aeronautics and Space Administration for the purpose.
"We will cover 25,000 villages over the next one month and scale it to 63,000 villages over the next two month," ICICI Bank's Executive Director Anup Bagchi said Tuesday, without offering any quantitative numbers on how the project will reduce cost for the lender as well as the farmers.
Though he claimed ICICI Bank’s agri loan book grew 14.3% year-on-year to about Rs 58,000 crore in the first quarter of 2020-21, Bagchi refused to answer how much the lender has already lent under the new project and how much it plans to lend.
The bank's rural business did well even during the lockdowns and no major hiccups are seen going forward, Bagchi said. The bank is using alomost 40 different set of images from ISRO and NASA satellites to assess credit worthiness of farmers, he said.
ICICI Bank is the first lender in the country and among a few globally to use satellite data to measure an array of parameters related to land, irrigation and crop patterns and use it in combination with demographic and financial parameters to make lending decisions for farmers, Bagchi said. The land verification is done contactless with the help of satellite data, credit assessment is done within a few days as against the industry practice of up to 15 days, he said.
Using satellite data provides quick and technically sound analysis of the land, crop and irrigation patterns from remote locations, without the need of the customer or a bank official having to visit the land, he said. Bagchi also said that it offers farmers advantage of reliable data being provided to the bank without any hassles of travel, operational or logistical expenditure to them, thus reducing their cost.
The bank is partnering with agri fintech companies specialising in harnessing space technology and weather information for commercial usage.
Some of the key satellite data being used by the bank are rainfall and temperature data of the past years, soil moisture levels in past years, surface water availability, and trends in crop sowing, among others.