Agricultural Finance Corporation

“Initially AFCL was established to finance agriculture and related activities. With the nationalization of commercial banks and priority sector lending by the commercial banks, AFCL’s function was diverted to agriculture consultancy to facilitate increased investments in agriculture and rural development projects,” avers Mr. A. K. Garg, managing director.

Agricultural Finance Corporation Limited was established in April 1968 and is promoted and owned by the commercial banks, NABARD and Exim Bank. These institutions hold around 90 per cent of the company’s share capital. AFCL provides agricultural & rural development consultancy and has its headquarters in Mumbai.

Services Offered
AFCL’s activities cover the entire sector of agriculture and rural development including agribusiness development, agro-industries, marketing, agricultural & rural credit, environmental impact assessment, micro-credit, social sector development, rural village industries, rural energy sources, etc. During last five years AFCL has entered in social sector like women development & empowerment, poverty alleviation, rural health & water supply, micro credit and micro enterprises and people’s participation. “With regard to consultancy in agribusiness, we have undertaken identification, promotion, formulation, evaluation, preparation of development projects and appraisal of hi-tech commercial agriculture and agro-processing projects to facilitate financial assistance from banks,” avers Mr. Garg.

AFCL’s functions in these areas include:
· Identification of potential projects for promoting development in different sub-sectors.
· Pre-feasibility studies.
· Formulation of projects for agricultural and rural development.
· Appraisal of project reports prepared by other agencies for financial assistance/implementation.

· Regional/sectoral planning.
· Performance certification, advisory and technical services to Implementing Agencies.
· Monitoring and evaluation of projects under implementation.
· Benchmark/base line, socio-economic, hydrological, topographic/contour pre-planning and engineering surveys.

· Socio-economic, techno-economic and marketing studies.
· Studies on flow of institutional credit.
· Training programmes, orientation programmes, workshops etc. for upgrading the skills of the bank and government personnel in project formulation, implementation, monitoring and evaluation and other relevant areas.

AFCL’s main clients comprise central/state governments, semi government autonomous and private organizations besides multilateral and bilateral funding agencies like: The World Bank, Asian Development Bank, African Development Bank, International Fund for Agricultural Development, European Union, etc.

“During last 39 years we have completed more than 5000 consultancy assignments worth more than Rs.220 crores. We have been involved in consultancy assignments in various fields like agriculture, irrigation, micro credit, rural credit, rural infrastructure, social sector and environment,” avers Mr. Garg.

Turnkey Consultancy Services
AFCL also provides turnkey consultancy services. “This service is normally undertaken for projects of high tech commercial agriculture nature. Our services include, assessment of the area coverage and equipment requirements, design of system, preparation of financing plan, identifying the supplier of machinery, supervision on a turn key basis, preparation of feasibility report and financial analysis,” explains Mr. Garg.
AFCL is working in a number of projects. Presently AFCL is assisting the Ministry of Rural Development in District Level Monitoring of Rural Development Schemes, Impact Assessment of Pradhan Mantri Gram Sadak Yojana (PMGSY) and few other RD programmes including preparation of perspective plans under Backward Regions Grant Fund (BRGF). Besides, AFCL is also executing assignments for other Ministries e.g. Agriculture, Environment & Forests, Minorities, Social Welfare and Planning Commission, etc. Ministry of Panchayati Raj, GOI has identified AFCL for preparing Comprehensive District Agriculture Plans the districts of various States in the country.
A few other major assignments are: (a) Maharashtra Water Sector Improvement Project – all over the states in Maharashtra; (b) The World Bank Aided Orissa Livelihood Project (WORLP), Bhubaneshwar; (c) Promoting Income-Generation Activities and Setting up Micro-Enterprises in Kushavathi River Sub Watershed in Chikkabalapur DWDO Area (Kolar District), Karnataka; (d) Perspective Plans under National Rural Employment Guarantee Act (NREGA) – various states of the country.

Some of AFCL’s projects going on at the moment to help the rural and urban population are: (1) Maharashtra Water Sector Improvement Project in association with Sheladia Associates,Inc.USA; (2) Chhattisgarh & Jharkhand Tribal Development Project, (3) Base Line Survey for Bihar Rural Livelihood Project (BRLP) (4) Comprehensive District Agriculture Plan (CDAP) in different States on behalf of Planning Commission, (5) World Bank Aided Orissa Livelihood Project (WORLP), (6) Regional Centre: National Afforestation and Eco Development Board (NAEB) (7) External Monitoring & Evaluation of Andhra Pradesh Community Based Tank Management Project; (8) Compilation, Prioritization and Recommendations of the Projects Funded by National Medicinal Plants Board (NMPB) , etc., etc.

When asked about the charges, Mr. Garg says, “AFCL is a fee based organization providing its professional services. Our charges are based on the cost of professional “man months” employed for professional services plus actual cash outgo and percentage of overheads.”

Microfinance Projects
Speaking about the microfinance projects AFCL is involved in, Mr. Garg says, “AFCL has formed around 60 Self Help Groups (SHGs) in urban and rural areas with a modest approach. We have started financing a few of them in urban areas. The selection of SHG for financing is on the basis of feed back from ground staff, interviewing the SHG office bearers and few other measures. As on today the recovery position is 100 percent on timely basis. We are presently in a pilot testing mode.”

“Normally, SHG families /females raised doubt about benefits or advantages and have doubt about trustworthiness of the agency. However, honest work always pays. As the people get involved in our projects, they are convinced of our transparency and commitment and start working with us in an open mind,” says Mr. Garg about the doubts of the SHG families.

International Projects
AFCL has participated in over 220 international assignments spread over 33 Asian and African countries and on behalf of multilateral funding agencies in matters relating to sustainable rural development, including agricultural development, rural financial services, poverty alleviation, social sector development, etc. “We have been registered with Asian Development Bank, African Development Bank. AFCL is also undertaking projects in collaboration with international firms,” avers Mr. Garg.

AFCL has a nationwide network of offices covering almost all the states in the country.
Headquartered in Mumbai, it has regional offices in Mumbai, Bangalore, Kolkata and New Delhi and state level branch offices in Bhubaneshwar, Dehradun, Guwahati, Hyderabad and Lucknow. Presently AFCL has total staff strength of 150 on regular basis covering all the offices. It also has around 60 consultants working in different offices in various tasks. In addition it has about 300 empanelled expert consultants in different disciplines. Mr. Garg avers, “AFCL is a public sector body with private efficiency. This is our special strength. Hence, people trust us and we, through our services, strengthen the trust.”

Mr. Garg is a post graduate in agricultural finance. “I have 30 years work experience in agriculture, rural credit and rural development with National Bank for Agriculture and Rural Development (NABARD) and Union Bank of India and also have long practical experience in rural banking, project finance, rural infrastructure financing, consultancy, microfinance, rural non-farm sector, etc. This experience became instrumental in developing my career path from a field officer to chief general manager in NABARD and presently as managing director, AFCL.

This experience has helped me in developing new areas, like, capacity building, training keeping rural poor in mind. My field experience helped in accelerating the investments from Rural Infrastructure Development Fund (RIDF) to rural India,” he maintains.

Our Correspondent

  • Sukhraj Bhatia

    I have 50 acre land in tamilnadu near madurai.I would like to establish a hi-tech horticulture farm at same. I am looking for bank & some result oriented consultant for the same


    Sukhraj Bhatia