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ICICI Bank introduces use of satellite data for credit assessment of farmers
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Thursday, 27 August, 2020, 08 : 00 AM [IST]
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Our Bureau, Bengaluru
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ICICI Bank has announced the usage of satellite data, imagery from Earth observation satellites to assess credit worthiness of its customers belonging to the farm sector. The bank is the first in India and among few globally to use satellite data to measure an array of parameters related to the land, irrigation and crop patterns and use it in combination with demographic and financial parameters to make expeditious lending decisions for farmers.
It has been using satellite data for the past few months in over 500 villages in Maharashtra, Madhya Pradesh and Gujarat and plans to scale up the initiative to over 63,000 villages shortly.
The technology helps farmers with existing credit to enhance their eligibility, while new-to-credit farmers can now get better access to credit. Additionally, since the land verification is done in a contactless manner with the help of satellite data, credit assessments are being done within a few days as against the industry practice of upto 15 days. This initiative gains significance at a time when people are advised to stay indoors and avoid travel in the wake of the Corona virus pandemic.
Anup Bagchi, executive director, ICICI Bank, said, “We have created new paradigms in the financial services industry by taking the lead in introducing pathbreaking innovations including firsts like Internet banking in 1998, mobile banking (2008), tab banking (2012), 24x7 touch banking branches (2012), software robotics (2016) and blockchain deployment (2016).
“The futuristic technology of using satellite data and analysis provides key inputs for credit assessments for lending to farmers. Now, imagery from earth observation satellite gives us groundbreaking ability to track many information across large areas in a contactless and highly reliable manner,” he added.
The bank has partnered with agri–fintech companies specialising in harnessing space technology and weather information for commercial usage. It has worked closely with them to build reports with over 40 parameters for assessing credit-worthiness of a farmer. The analysis is put together using algorithms to analyse images available from satellites around the planet. Additionally, the bank has worked on further scoring models to create indices at district level, village level as well as for individual land to provide an estimate of the past and future agriculture income, the timing of harvest and sources of income, and thus, provide key inputs to credit assessments.
Some of the key satellite data being used by the bank are rainfall and temperature data of past years, soil moisture levels in past years, surface water availability, trends in crop sowing including crop name, tentative sowing & harvesting weeks, crop health and yields, agriculture land location details including latitude, longitude and boundary of the land and nearby locations of warehouses and mandis.
This innovative technology will help farmers, who are existing customers of the bank as well as non-customers, to avail KCC (Kisan Credit Card) loans. KCC attributed one-third to the bank’s rural loan portfolio of Rs 571.77 billion in the quarter ended June 30, 2020.
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