Tamil Nadu-based agri-fintech start-up KiVi, a digital platform, plans to obtain a non-banking finance corporation (NBFC) licence by filing an application with the Reserve Bank of India (RBI) over the next couple of months, says its founder Joby CO, founder and CEO. “That’s the plan. We have the funding now, ready to file the  application with the RBI,” Joby told businessline in an online interaction. 

The finance firm, which means kisan vikas (progress of farmers), closed its first seed round equity race in August. “We raised about ₹15 crore from some of the marquee investors,” he said. 

Spreading wings

KiVi, owned by Agrosperity Tech Solutions Private Limited and launched in April 2022 from IIT-Madras incubation park, currently operates in Bihar and Tamil Nadu, where it is active in Kallakurichi and Salem districts. 

Joby CO, founder and CEO, KiVi

Joby CO, founder and CEO, KiVi

“We are spreading, keeping Salem as a base. We are now looking at Namakkal, Dharmapuri and Krishnagiri — all our great districts. We have a way to look at districts by looking at their agri GDP,” Joby, who has over two decades of experience in rural lending. 

KiVi looks at satellite data over the last 100 years particularly looking at instances of floods and droughts in the districts. This is to avoid high flood or drought-prone districts in the early part of its operations. 

Focus on technology

“Our early customers are two-plus acres farmers as below 2 acres it is not sustainable as growers have to look for something else (to supplement their income),” he said.  Two-plus acres is a decent land ownership with over 50 per cent of their household income coming from the farms. 

The farmers also own milch animals and livestock since agriculture provides them a meagre income. “In my past 20 years of lending in rural areas, the two-plus acres farmers have been the best of the paying customers,” the founder and CEO said.

KiVi is concentrating on the technology side with its key value propositions being a unique digital platform and local franchisee network called KiVi Star. The network makes the last-mile connection with farmers to access the company’s services.

The agri-fintech firm leverages the large-scale adoption of smartphones, better data connectivity, improving rural digital adoption and the “India Stack” to deliver products and services directly to farmers, said the founder and CEO, a chartered accountant by profession. So far, it has enabled loans to about 2,000 farmers amounting to ₹7.4 crore in one year. 

Role of aggregators

“We hope to build this business to almost ₹80 crore assets under management in the next 12 months, reaching almost 11,500 farmers and 500-plus agri entrepreneurs who are helping farmers in the local area and also do ₹25 crore-worth of commodity marketing of paddy, wheat, maize and other commodities,” Joby said. 

As it enters a new district, KiVi figures out the dominant commodity  and then looks to aggregate before finding buyers for the produce. “We have roughly about 15 buyer companies (including ITC, Britannia and Cargill) on our platform. All are grain buyers, largely feed manufacturers, processors and exporters,” the founder and CEO said.

There are also four farmer producer organisations (FPOs) in its fold. “We don’t procure directly from farmers. We purchase through aggregators or FPOs, who would have bought from farmers or aggregated the farm produce,” Joby said. 

On the other hand, KiVi can enable corporates such as ITC to directly buy from a district. “We enable it through trade finance and sellers can get the money immediately, while the corporates can take 60 days to pay. We have bill discounting and other such facilities,” he said. 

Differing needs

With a lot of development work happening, it is now possible to  underwrite farmers easily. “There is satellite technology and most of the things related to agriculture are digitised such as land records. There are cadastral maps that are accessible and can provide details on what has been happening on that farm,” Joby, who had earlier founded Varam Capital. 

Banks now have ways to verify farmers’ details, though there are challenges such as partition of lands. “We are building the right kind of technologies and also local presence which is very critical,” he said.  

Joby said KiVi understands the timely requirement for money by farmers and also the quantum they need. “A 5-acre farmer with a maize crop needs a very different amount than a 2-acre farmer who grows some other crop. Somebody else who is looking for  horticulture would need shorter credit but a larger amount of money because the seed and other things will be very costly,” he said. 

The agri-fintech company looks at the timely requirement and amount, the founder and CEO of the company said, adding that Federal Bank is one of those working with it along with a few NBFCs.