The State Bank of India is planning to launch “SAFAL” which is a loan product that is primarily focused on organic cotton growers who don`t have any credit history.
According to State Bank of India Managing Director, Mr. C S Setty, who was speaking at a fintech conference organized by the Federation of Indian Chambers of Commerce and Industry (FICCI), the bank is using Artificial Intelligence (AI) and Machine Learning (ML) to generate business. SAFAL stands for Safe And Fast Agricultural Loan. The bank plans to move beyond the retail segment and reach out to farmers by providing services other than traditional crop loans.
A database about organic cotton growers has been created by a company based on blockchain and any buyer of cotton across the world can check whether the farmer is growing organic cotton.
The State Bank of India plans to take the data and provide credit linkage to them because the organic cotton growers don`t have a credit history. SBI can provide loans to the cotton growers because the technology has picked them up and has brought them together and has provided market visibility to them.
The State Bank of India has done 1.7 million pre-approved loans and 21,000 crore businesses have been booked under the Safe and Fast Agriculture Loan (SAFAL) using Artificial Intelligence and Machine Learning during the lockdown period.
The State Bank of India has tapped the potential of data analytics and the Artificial Intelligence and Machine Learning department is not an experimental department, but a business-oriented department. The bank has had a net income creation of 1,100 crores in the last two years with the aid of Artificial Intelligence and Machine Learning.
The State Bank of India currently has more than 40 Machine Learning based models which the bank uses across the spectrum for risk mitigation, business, and fraud management. SBI plans to scale up its business of Artificial Intelligence and Machine Learning by launching the SAFAL loans. The bank currently does not provide crop loans to cotton growers, however by launching the Safe and Fast Agriculture Loan (SAFAL), organic cotton growers can avail the loan facility.
