Agri-fintech startups are filling the gaps in the agricultural value chain by improving FPOs and farmers' economies
One of the rising trends in the agricultural landscape is the emergence of agri-fintech startups, which are working to level the field of marginal farmer communities to build ties with the market. Its raging popularity is due to the induction of digital aesthetics to improve agricultural value chain financing by working with farmers/FPOs on bettering their productivity and economies.
Unlike traditional practices of farming and lending, this is a transparent, uniform, and technology-backed system which simplifies things for farmers. It advocates the growth of farmers/FPOs, paving the way for a booming market. But before we dwell on the intricacies, let’s understand the concept of agri-fintech startups.
A new-age innovation
Agri-fintech can be defined as using technology to fill the gaps between banks, financial institutions, and value chain operators, accounting for farm inputs, farm health, climate conditions, yield rate, and market prices that create the agricultural economy. As a pragmatic solution, this facet of the startup landscape aims to establish efficient interconnections between producers, processors, aggregators, and traders, ultimately streamlining the farming process. In India’s current economic climate, this innovation arrives with impeccable timing, serving as a vital tool in forging reliable linkages with emerging markets amidst a global environment of expanding trade opportunities.
Aid to credit-building
A crucial aspect of the Indian farming system is that it is more regulated than structured. Agriculture is prevalent across the mainland, communities, and classes. There are big farmers with acres of land, and then there are those with a meager plot. Disparities in crop yield, harvesting methods, and market dynamics persist across different regions, contributing to inconsistencies in agricultural practices. As a result, financial institutions are unable to identify trustworthy benchmarks to establish creditworthiness, initiating a downward spiral of inadequate funding and reduced productivity, which adversely affects the ancillary industries as well.
An agri-fintech startup plays a significant role in fixing this informal outlook as they take charge of the timely payment of dues. This helps farmers and FPOs at the very base-level draw credibility to gain the required finances to kickstart their cultivation practices.
How does it all fall into place?
Agri-fintech startups, such as Ayekart, can help farmers and FPOs overcome the daunting task of entering a new market. Farmers/FPOs unfamiliar with market rates and practices may find this task incredibly intimidating. Ayekart provides a one-stop solution for strengthening the supply chain of farmers and FPOs and optimizing the business process. By using aggregation market linkage, technology, finance, and value-added services, Ayekart bridges the gap between seller and buyer. Its ecosystem helps users to grow and scale their businesses, opening new revenue generation opportunities at the core of MSMEs. Once a brand is established, demand rises automatically; all farmers/FPOs need to do is feed it.
Beyond the breakthrough, startups are also invested in educating farmers about their product, its yield, and the technique to better it to achieve the maximum output with minimal investment. Then comes the pricing part. Agri-fintech startups emphasize the importance of high-quality product boards to prevent farmers/FPOs from being pressured into selling at lower prices. Their goal is to secure the most profitable prices for farmers’ supplies, and these modern companies ensure that the process is carried out until the very end.
Co-founder & CEO,
Ayekart
The tale of financing and investments
Any good financial advisor will let you know how to use your money best to increase income. That’s key to building a more significant enterprise out of any business. If you have the vision, agri-fintech startups help you identify and imbibe best practices of managing money, investing, and trading to ensure better returns. This helps bring more funds to the farm, helping small farmers and FPOs expand their horizons strategically.
Bottom line
The term agri-fintech might be new, but its role is a norm. Many agri-techs and NBFCs that have been around for a while are expanding into financing once the initial inputs and value chains have been established. These companies understand the market and already have the requisite data models and market associations to design a well-strategized approach to help with the finances.
