DBS Bank’s custom financing leads the way for companies trying to reach net-zero goals

In the past decade, around two-thirds of Indian companies have made a key addition to their business strategy – sustainability. But, less than a half of them have made it a cornerstone of their business, as per a Frost & Sullivan and Autodesk report. For this to translate into action, India needs massive amounts of financing to make it possible - to the tune of $1.4 trillion just for the private sector till 2030 to fulfil UN developmental goals according to Nationally Determined Contribution (NDC).

Most financers however believe that the grassroots need to be sufficiently financed to allow large companies to be able to procure right and decarbonize their supply chains. Financiers like the digitally-forward DBS Bank. “We, at DBS, believe that a large lacuna exists between required types of financing and actual availability. Yet, the Indian market is ripe for opportunities in the climate-conscious business transition. But achieving sustainability in the real sense requires channel partners and vendors to be educated and financed.

This is where we have identified our sweet spot for developing solutions for real clients to solve real business problems.” said Arvind Sharma, Head of Priority Sector Lending at DBS Bank India.

One such intervention is a partnership between the Bank and one of the world’s largest fashion retailers, Inditex which owns brands like Zara. DBS’s pilot financing program reached 2,000 farmers in Inditex’s cotton supply chain, where farmer producer organizations or FPOs were able to transition to organic ways of producing the crop. The financing solution was designed to help farmers expand sustainable practices and provide visibility of their cash flow. It has the potential to scale to benefit over 25000 farmers, as per the Bank.


“The pilot programme was an integral part of DBS Bank India’s larger plan to build its priority sector lending business. Priority sector covers under-banked sections which the Reserve Bank of India considers important for the overall development of the economy – including agriculture; small businesses; affordable housing; education and renewable energy,” explained Mr. Sharma.

A farmer turns an FPO director

The programme, in addition to encouraging sustainable practices, also plays a role in improving the lives and livelihoods of the farmers and their families, while strengthening the rural economy. Sushila Varkaya, a multi-generational farmer from Asalya in Madhya Pradesh was one of the first to move to organic farming a few years back. Before that, her family of five had been toiling away in their small farm, struggling to make ends meet.

However, after she was trained by an NGO Action for Social Advancement (ASA) which has been working the area with over 25000 farmers to encourage organic farming, she has been reaping rewards from organic farming. She now uses bio-fertilizer and similar products to replace chemical pesticides, which has not only improved the quality of the soil, but has also reduced dependence on expensive fertilizer.

Her success has led Sushila to becoming an influencer in the community. She has also become a director of an FPO of the area supported by ASA, which is helping other farmers access resources and markets. “I now intend to help my sisters make the same shift as me,” says Varkaya.

Cotton farmers in India have been under a debt cloud for decades now. The solution required a backer with the necessary focus on responsible banking, the ability to make the connections and design an innovative program to meet both on-ground needs of the farmers and the larger business goals of the client Inditex.

“Transparency is also another benefit of the pilot programme as it eliminates the middlemen in the organic cotton supply chain. The programme enables Inditex and cotton spinners in its ecosystem to trace the source of the cotton and ascertain if it has been farmed sustainably. This ensures farmers a higher premium for their organically harvested produce vis-à-vis traditionally farmed non-organic cotton,” said DBS Bank, in a press release.

Aiding sustainable farming practices is one of the many ‘transition finance’ projects that DBS undertakes, as a part of its plans to aid United Nations’ sustainability goals. Globally, the Bank has committed as much as SGD 50 billion towards financing renewable energy, clean energy and green projects by 2024. Last month in India, DBS Bank launched a campaign called Portraits of Purpose to chronicle the real stories of individuals and businesses who are leading the pathway to a better world.

Reach out to DBS Bank India to find out how we can help your company grow sustainably:
https://go.dbs.com/PoPJan22

Disclaimer: This is a sponsored article in partnership with DBS Bank India