Agri Financing The Next Era Of Evolution For Agriculture

Timely and adequate availability of finance is a prerequisite for the growth of any sector and agriculture is no exception.

- Mr Sandeep Sabharwal

However, the challenges in accessing finance have hampered the growth of this sector specifically. The existing financial infrastructure in India has not been able to meet the key financial needs that arise along agricultural value chains. Many agri intermediaries, as well as farmers, are either left un-served or underserved due to the lack of timely access to institutional finance via agriloans. The market demand for smallholder agriculture finance is huge and is largely unmet. Without access to credit, most smallholders are restricted to farming, trading, processing practices that result in low levels of productivity. Although various financial institutions have come up and have set up shops in rural India, the majority of agri stakeholders still have limited or no access to them.

For the inclusive development of the agriculture sector, financing is an important element. It can play a critical role in plugging the gaps in agriculture and ancillary sectors by providing end-to-end solutions like credit and service to various participants in the agri value chain ranging from farmers, aggregators, traders, processors, importers, and exporters. Agri financing has an important role to play in supporting both on and off-farm agricultural activities and businesses including: input provision; production and distribution; wholesale; processing and marketing.