CHENNAI, 26 December 2021: Samunnati an agri-value chain enabler has entered an industry first co-lending agreement with IndusInd Bank to expand credit accessibility and market linkages for farmer producer organisations (FPOs) across the country.
This collaboration will provide INR 15 crore as an initial amount, to be disbursed exclusively to Farmer Collectives.
The primary aim is to ensure the self-sustainability and profitability of Farmer Collectives and their members, comprising mostly small-holder farmers.
This strategic alliance will enable easy access to working capital to Samunnati’s growing network of 1500 Farmer Collectives with a member base of 6 million farmers.
Speaking to the Founder & CEO of Samunnati, Anil Kumar SG said, “We are delighted to partner with one of the most credible banks of our country. Having IndusInd as a partner in our mission of making markets work for Small Holder Farmers through breaking the barriers of access to working capital and creating higher equilibrium in the agri value chain will help us accelerate our outreach manifold. Our collective goal with this alliance is to improve the flow of credit to the underserved agri community at an affordable cost, by leveraging the dual advantage of funds at a lower cost and Samunnati’s extensive FPO network.”
In November 2020, the Reserve Bank of India (RBI) issued guidelines on Co-Lending Model between Scheduled Commercial Banks and NBFCs. IndusInd Bank is among the first scheduled commercial banks to participate in such a co-lending program aimed at mainstreaming FPOs as an asset class.
Agriculture is the primary source of livelihood for 58 percent of the Indian population and about 60 percent of India’s land is used for agriculture. Yet, irrespective of this immense agricultural promise, India’s farmer population struggles with access to capital, technical know-how, scale acumen and production efficiency. As a specialized agri value chain enabler, Samunnati strives to bridge these gaps by working with players across the value chain thereby, enabling them to function at a higher equilibrium through timely and customised solutions.
Srinivas Bonam from IndusInd Bank said “We see merit in “Farmer Producer Organizations (FPOs) as it is a best-fit model to help farmers pursue agriculture in a more effective and organised manner. This collaboration is in line with the Bank's strategy to bring efficient and inclusive lending solutions. We are very keen on promoting this intervention and are very happy to partner with Samunnati which is a market leader in this space. While enabling timely credit to FPO’s, we shall work together to help facilitate market linkages to the FPO’s. We look forward to successfully pilot Co-lending to FPO’s and take it to deeper levels of impact as we progress in this partnership”