DBS launches organic cotton procurement financing pilot programme with global fashion retailer Inditex
Spurs development of sustainable organic cotton supply chain ecosystems in India
Mumbai: DBS Bank has partnered with one of the world’s largest fashion retailers, Inditex, which owns brands such as Zara, Pull&Bear and Bershka, to launch an organic cotton procurement financing pilot programme to ramp up efforts to scale India’s organic cotton industry.
While India is currently the largest producer of organic cotton globally, with the greatest land area used for organic cotton cultivation in the world, organic cotton only comprises of 2.29% of the total amount of cotton produced in India.
DBS through its partnership with Inditex will leverage the network of local Farmer Producer Organisations (FPOs) to reach more than 2,000 farmers in Inditex’s supply chain to evaluate farmers’ financing needs. Under the pilot programme, DBS will then arrange financing for the FPOs to procure organic cotton from the farmers, in a timely fashion. This provides farmers greater visibility of their cashflow, enabling them to better plan their business needs and in turn, grow their sustainable farming operations.
With growing focus on climate risks and social inequality, the global cotton industry offers huge opportunity to invest for positive impact said Terence Yong, Group Head of Western Multinational Corporations, DBS Bank. “Globally, our clients are increasingly mindful of looking for ways to add societal and environmental value through their business decisions, with many taking the leap to digitalise their supply chains to enhance transparency and traceability of transactions made,” said Yong.
“The pilot programme forms an integral part of DBS India’s larger plan to build its Priority Sector Lending business. Priority Sector covers under-banked sectors which the Reserve Bank of India (India’s central bank) considers important for the overall development of the economy – including Agriculture; Small Businesses; Affordable Housing; Education and Renewable Energy,” said Arvind Sharma, Head of Priority Sector Lending, DBS Bank.