When prosperity meets technology, the Indian countryside rocks. A small sugarcane-growing district in rural Tamil Nadu now has more ATMs and ATM users than most posh city areas you can think of. No farmer here takes cash payment. 

There is a network of 23 bank branches where money transfers through the Net. Roadside kiosks tell you your bank balance and double up as cyber cafes if you’ve got the time. 

Welcome to Nellikuppam in Cuddalore district, where in a population of 25,000 small cane farmers, more than 60% have ATM cards with heavy usage. Having the country’s first sugar factory is its old claim to fame. 

State Bank of India and its associate banks, ICICI Bank, and Indian Bank have already got ATMs in Nellikuppam. Envious of their first mover advantage, several other public and private banks are now trying to muscle in on the business. 

Already, at Pettaivaithali in Tiruchirappali district, also a cane-growing area, UTI Bank has set up an ATM, while ICICI and Indian Overseas are planning one each in Pudukottai district. 

The competition to grab more customers has also led to a drop in loan rates, with 8.5-9% being the average rate for farmers looking to bore a tube well, buy implements and agri-inputs. 

So what makes these small places magnets for financial institutions? One, they are part of the cane economy, which has always had a highly organised payments and accounts system. 

Two, corporate push from the Murugappa group’s flagship EID Parry, local mai-baap and one of the largest players in India’s food and agrochemicals industry. 

The company is the first in the country to decide against paying farmers a single rupee in cash. That has galvanised the entire economy in its cane-growing areas to move towards advanced banking. 

“Though we have one lakh growers as suppliers and pay Rs 250 crore for cane, we have decided to have completely cash-less transactions with each one of them,” says CFO D Kumaraswami. 


So the company directly credits the money it owes to individual farmer accounts. The farmers access them through ATM cards. 

But that is easier said than done. EID’s farmers have accounts with a dozen major banks, with over 600 branches spread in the three districts. Sending money owed to each individual farmer to his bank account is a Herculean task at best. 

Some, like Lakshmi Vilas Bank, even have branches in its factory premises. That put intense pressure on EID’s cane purchase and accounts office. 

“Indian Bank and ICICI in Nellikuppam have now come forward with a novel scheme of connecting all 23 branches in the district through a network which allows money to be transferred electronically to each farmer’s account. EID sends a single advice to these banks, which is then transmitted to individual branches for crediting money,” says Kumaraswami. 

To enable farmers to find out their bank balance without approaching the company, EID has set up 20 Net-based kiosks, where farmers can access their bank account details free. These Parry’s corners will now be further extended to other districts and can be used for Net browsing and other commercial purposes as well. 

EID also undertakes all the back office work for the banks giving loans to farmers. Under its Hassle-free Farmer Loan Scheme, it tries to ensure that growers get the cheapest loan in the shortest time. EID certifies the cane acreage and planting by every farmer seeking a loan, thus acting as a trustee for the loan, minus any financial commitments. 

Everyone — from company, bank to farmer — operates in complete transparency, which builds mutual trust and encourages investment.