Agri fintech start-up Kisan Vikas (KiVi, operated by Agrosperity Tech Solutions, and an incubatee of IIT Madras Research Park) has announced the launch of farm loans on its platform which allows small holders to access timely, affordable and structured credit from lending institutions.

KiVi has been founded by Joby CO with over two decades of experience in rural credit and agri business. Co-founders include Padmakumar K (Rural Credit), Rajendra Kumar (Agri Business), Salil Nair (Technology) and Manoj Ramaswamy (Finance and Strategy). It has partnered with financial institutions and technology providers, and employs a unique underwriting method that considers farmer’s credit profile, farming history, crop characteristics, commodity price trends and weather pattern.

Digital and phygital means

KiVi provides digital solutions and a phygital platform for the farmer to procure input, access credit, implement agronomy practices, process and market output. Founder and CEO Joby claimed KiVi is a first of its kind technology platform designed for farming as a business enterprise and will allow farmers to access services such as agronomy, input supply, buyer aggregation, financial services, logistics, quality management, risk management and warehousing, among others.

Loans for range of needs

Through KiVi, lending institutions including PSU banks have ready access to high quality, end-use verified PSL (Priority Sector Lending) portfolios. Farmers can access loans at the exact time when they need funds, whether it is for purchase of seed, fertiliser or pesticides or for meeting other related expense such as hiring a tractor or labour. The loan repayment is structured to align with the seasonality in the farmer’s cash flow instead of a flat instalment.

Farmers can sell output, too

In addition to accessing loans, small farmers can sell their output on the platform which has so far enabled agri commodity procurement worth ₹5 crore (wheat, paddy and maize) from 200+ farmers in four select districts in Bihar, the spokesman added. Participating farmers have earned patronage bonus of two per cent or above from the transactions. KiVi is gearing up to launch its input market linkage solution by the end of this quarter and is exploring seed investment to support its platform development and operations scale-up.

Aims financal independence

Joby said KiVi is thrilled to launch its loan product coinciding with India’s 75th Independence Day celebrations. “We believe that timely, affordable and suitably structured loans will go a long way in helping small holder farmers achieve financial independence”. Prior to founding KiVi, Joby was the CEO of Dvara KGFS, a rural financial services provider.

Seamless loan disbursement

Padmakumar K, Co-founder and Chief Product Officer, KiVi, said loans will initially be enabled for in select districts in Bihar, and soon in Tamil Nadu. “We assist farmers to get enrolled on our tech platform. Thereafter, the technology platform performs the underwriting and ensures seamless disbursement of loans from the lender to the borrower’s bank account.” Padmakumar thanked finance and technology partners for support in the development of this farmer-centric product. “We are encouraged by the keen interest shown by lending institutions in co-developing direct agri PSL loans,” he added. Prior to co-founding KiVi, Padmakumar headed the microbanking business of ESAF Small Finance Bank.

Livelihood of choice

As much as 85 per cent of farmers hold less than two hectares of land and 50 per cent of them do not have access to formal credit. Further, their productivity is at least 60 per cent lower than global averages. “Therefore, agriculture does not provide sufficient income to be considered as a livelihood of choice. KiVi is on a mission to make agriculture a livelihood of choice for millions of Indians,” Joby said. Conventionally, a farmer avails loans from a local money lender at exorbitant interest rates and is subject to unfair practices. On the other hand, formal finance institutions find it difficult to establish the last mile transaction capability that is required to effectively originate and service farmer loans, he added.

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