Top 5 Fintech Companies That Offer Easy Loans To Farmers

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By Priya SinghUpdated On: 17-Feb-2023 08:46 AM

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Englishहिन्दीमराठीਪੰਜਾਬੀதமிழ்తెలుగు

ByPriya Singh |Updated On: 17-Feb-2023 08:46 AM

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3,645 Views

Here we will discuss the top 5 fintech startups that give loans to farmers.

A farmer may require financial assistance for a variety of reasons, including the purchase of tractors or harvesters, seeds or fertilizers, and so on. With this in mind, several banks and fintech companies in India offer easy loans to farmers. Today's post will discuss the top 5 Non-Banking Financial Companies that give loans to farmers with a very easy and simple process.

In recent years, the FinTech business has received a lot of attention. Furthermore, it has had a favourable influence on most industries in various ways. On the other hand, the agriculture sector has undergone a substantial transformation and has made important contributions to the global economy.

Borrowing money is a typical aspect of any farming activity in many countries, including India. Until now, farmers were obliged to go through intermediaries and jump through multiple hurdles in order to obtain the cash they needed to operate. That is no longer the case, owing in large part to the efforts of the fintech sector to make direct loans more accessible to everyone.

Farming, particularly modern farming, requires financial support. However, for the longest period, a substantial proportion of small-scale farmers have had difficulty obtaining financial resources. But now Farmers have easy access to farming loans and other sorts of capital

Thanks to FinTech Companies. FinTech makes it simpler for both small and large-scale farmers to acquire capital. India and African nations are prime instances of how farming is flourishing because of FinTech businesses.

What Exactly Is Fintech?

Fintech refers to innovative technology that is utilized to assist in the delivery of financial services. This covers mobile payments and money transfers, as well as internet banking and investment. Fintech has the potential to alter the way we interact with our finances, making money management easier and faster.

Financial inclusion in the farming industry has historically been low in India and the surrounding region, but this is changing as various financial services become more affordable to farmers in the region. Some new companies entering the market are even focused on this element particularly, delivering a wider range of financial tools and utilities to this market segment.

Here are some NBFC/fintech companies that provide farmers with low-interest loans. Let us learn more about them.

1. Jai Kisan

Jai Kisan's goal is to create the first entire and seamless banking experience for rural people. A significant credit gap in the rural market, which was being filled by informal moneylenders at exorbitant rates, prompted the need for change in how over 600 million people in India did their day-to-day banking.

Individual farmers and farming companies can buy farming equipment at credit rates ranging from 8% to 24%. Loans are only made against productive assets that can be recovered in the event of a default. Farmers' credit scores are built using information gathered about them.

Jai Kisan is trying to accomplish for farmers what policy bazar accomplished for vehicles.

2. Samunnati

Samunnati, India's largest agri firm, is an open agri network aimed at unlocking the trillion-dollar-plus potential of Indian agriculture, with smallholder farmers at the centre. It is a Chennai-based firm that connects smallholder farmers to markets and offers finance options,

Samunnati operates in 22 states but receives 30% of its business from Tamil Nadu. It also offers other services like working capital loans, bill discounting loans, short-term loans for less than a year, and long-term five-year loans to assist farmers and agri-businesses in purchasing farming equipment or other infrastructure.

3. Kisan Vikas(KiVi)

The company claimed that it is a first-of-its-kind technology platform designed for farming as a business enterprise, allowing farmers to access services such as agronomy, input supply, buyer aggregation, financial services, logistics, quality management, risk management, and warehousing, among others.

Agri fintech start-up Kisan Vikas offers farm loans on its platform. Farmers can get loans when they need them, whether it's for the purchase of seed, fertilizer, or pesticides, or for other connected expenses like hiring a tractor or labour. Instead of a flat instalment, the loan payback is structured to match with seasonality in the farmer's cash flow.

It has formed alliances with financial institutions and technology companies, and it applies innovative approval processes that take into account farmers' credit profiles, agricultural experience, crop characteristics, commodity price movements, and weather patterns.

4. GramCover

GramCover is a hybrid insurance firm focused on insurance product design and technology-enabled distribution in rural India. To reduce inefficiencies and transaction costs, they have created a unique technology-led distribution and maintenance approach particularly suited for rural setups.

5. Arya.ag

Arya.ag has storing facilities at the farm gate, as part of a network of 10,000 warehouses spread throughout 25 states. A farmer may use its app to find a warehouse near him, apply for a low-interest loan, and receive it in minutes.

Individual farmers' average ticket size is Rs 3-5 lakh, while FPOs' average ticket size is Rs 25-27 lakh. Arya.ag has witnessed low default rates because the loan is secured against the collateral of a commodity and it is a liquid asset.

The following are five ways that the Fintech Sector is supporting agriculture:

1. Simple Loans for Farmers.
2. Direct Contacts.
3. Permanent Payment Model.
4. Cost Effective Financial Services
5. Cheaper Insurance

Conclusion

Farmers now have better options to build direct links with bankers and other organizations that may be vital in their operations. Now they don't have to rely on middlemen, All this credit goes to NBFC/fintech companies.

FinTech's are becoming an important element of India's financial ecosystem. They are one of the most powerful engines contributing to the country's unending expansion. Fintech serves as a foundation for our economy, laying the groundwork for additional technical advancements such as Artificial Intelligence and Machine Learning.

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