International Finance Corporation (IFC) has invested Rs 640 crores in Mahindra & Mahindra Financial Services, to expand its footprint in the farm loan sector to farmers to buy equipment such as tractors and finance small and medium enterprises.
IFC, a member of the World Bank group said it would finance through secured non-convertible debentures to Mahindra Finance, which is one of the biggest farm equipment supplier in India.
“Mechanized farming can cut costs by 25% and raise productivity by 20%, which will help meet the government’s target of doubling farmers’ incomes by 2022,” IFC said in a statement, adding that at present, less than 30% of India’s farmers use modern equipment.
“The new loan will help the company expand further and cater to the needs of small landholders. 60% of rural households depend on agriculture for their livelihood. Yet, agricultural productivity has not increased and climate change holds a serious threat to the sector,” Mahindra Finance, a subsidiary of Mahindra & Mahindra said.
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