Having a firsthand experience of the inequalities prevailing in agricultural finance in India while working in the agri division of a leading private sector bank, Prasanna Rao decided to take matters into his own hands. He noticed that a significant portion of loans were being disbursed to large agri traders in major markets, neglecting the smaller players such as farmer organizations and small traders who operated near the farm gate.
Motivated by the plight of these overlooked players in the financial ecosystem, Rao launched Arya.ag. The fintech platform’s primary objective is to tackle the diverse challenges facing the Indian agriculture sector.
One of the key solutions offered by Arya.ag is storage facilities at the farm gate, eliminating the need for farmers to transport their produce over long distances. In addition to storage, the platform provides instant access to loans against the stored produce. When market conditions are favorable, Arya.ag facilitates the sale of the produce to a network of buyers, ensuring that farmers receive better prices. This comprehensive service has led to a 15-40% increase in farmer incomes annually.
Notably, Arya.ag boasts a near-zero non-performing asset (NPA) rate on loans extended through the platform. To date, the platform has facilitated transactions worth $600 million between farmers and buyers nationwide.
While scaling up the model presents its own set of challenges, particularly given the small ticket size of loans, Rao remains optimistic. Arya.ag currently operates in approximately 60% of the country’s districts and has secured $90 million in equity funding. The platform serves around seven lakh farmers and 650 farmer producer organizations (FPOs).
Looking ahead, Arya.ag plans to expand its reach to more districts, aiming to engage with nearly 20 lakh farmers in the near future. The goal is to increase the platform’s coverage from 3% to 7-8% of India’s grain production within the next three years.
