Sowing Innovation and Affordability: Agri-Tech Start-ups Transforming Agricultural Financing in India
India has over 2207 DPIIT recognized Agri-Tech startups
India has over 2207 DPIIT recognized Agri-Tech startups spanned across 360 districts and employs 18,000+ individuals as of April 2023. Additionally, in the last 4 years, Agri-Tech startups have raised Rs. 6,600 cr via the PE route, which is a 50%+ growth annually.
These numbers are fascinating for the country which holds the second position for holding agricultural land globally and has 60% of its rural population, and 44% of its total population engaged in the agri sector.
The Indian agriculture sector, while thriving and contributing 16% to the nation’s GDP, faces certain challenges. While some are climatic, one major challenge that farmers face is the gap in opting for financing and managing the supply chains, which often results in them losing the crop or earnings and sometimes both.
To address this, Agri-Tech startups have been at the forefront. Here are three such Agri-Tech startups.
1. Arya.ag
While farmers can avail of traditional credit when it comes to marginally small-size farmers, the disbursal rate is hardly 1%.
This can be a challenge for farmers not only in the initial phase but also in the end phase of managing the crop as they can’t afford warehouses.
The result is that farmers have to sell for lower prices as they cannot commute the crop to the nearest urban centre or else sell early to avoid the hassle of storage.
To address this challenge, start-ups like Arya.ag are very helpful. Arya.ag has a presence in over 25 states with 10,000 warehouses.
Farmers and Farmer Producer Organisations (FPOs) can easily opt for loans against their commodity at lower rates. It bridges the gap between financing and storing commodities and also helps match buyers and sellers.
2. Whrrl
This Agri-Tech start-up works quite similarly to Arya.ag. It offers financing as well as warehouse facilities to farmers.
It helps farmers monetize their commodities lying ideal in warehouses and get rid of waiting for working capital tied to the crop cycles. It helps farmers better manage their commodities and fund the infrastructure and equipment requirements.
However, Whrrl uses a unique blockchain approach and tokenizes warehouse tickets by using the Internet of Things (IoT) and Smart Contracts. This helps the start-up in reducing instances of fraud and duplication. Smart Contracts enable automated execution when certain conditions are met, such as loan approval and disbursal.
Whrrl has 1400 warehouses in Maharashtra and 4 other states. It has also disbursed $12 million in credit to farmers to date and has $600 million in tokenized commodities.
According to its official website, the platform has helped its farmer base increase earnings by 25% to 300%.
3. Samunnati
It offers small-size farmers the facility of market linkages and financing. Samunnati helps farmers’ produce match with buyers via its platform.
There is a base of 6 million farmers and a presence in 22 states.
In addition, the start-up also provides farmers with bill discounting loans, working capital loans as well as short and long-term loans to farmers and agribusinesses.
Conclusion
Agri-Tech start-ups listed here, there are many such start-ups that deserve recognition and encouragement to support the agri sector in the country like the Agriculture Accelerator Fund introduced in Budget2023.
From Jan-Sep 2022, Agri-Tech startups witnessed 30 rounds of funding valued at $796 million. Do you think 2023 will cross that number?
