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Agri finance company Samunnati has entered into a co-lending partnership with State Bank of India for financing farmer producer organisations (FPOs). The initial outlay is ₹100 crore, Samunnati said in a statement.
Leveraging SBI’s vast resources, the partnership will enable Samunnati to reach more FPOs with customised financial solutions at affordable interest rates, it said. It will also enhance SBI’s outreach to the under-served segment of small-holder farmers by leveraging Samunnati’s experience with the FPO sector, the statement said.
SBI and Samunnati have also entered into a non-financial MoU to develop the FPO sector, mainstream it as an asset class and increase the awareness of this class of farmer-owned institutions in the banking sector.
Samunnati works with a network of over 3,000 farmer collectives with six million-plus members and solutions spanning agri finance, agri Commerce, and advisory services.
“We are delighted to partner with SBI, the largest and most trustworthy brand in Indian banking. SBI’s pan-India presence and deep interest in financial inclusion of the small-holder farmers are enablers for helping an FPO avail an array of financial services. Our collective ambition is to make markets work for small-holder farmers by making available adequate, affordable and timely credit to the FPOs,” said Samunnati Founder and CEO Anil Kumar SG.
In November 2020, the Reserve Bank of India issued guidelines for co-lending by scheduled commercial banks and non-banking finacial companies (NBFCs). SBI is one of the first banks to participate in a co-lending programme aimed at mainstreaming FPOs as an asset class.
Sree Rama Charyulu M, General Manager, NBFC Alliances at SBI, said, “We see an immense possibility in this partnership for impacting the agri ecosystem. The focus of Samunnati in creating an impact in FPO space is of extreme relevance and we believe there is significant rural business opportunity hidden within such farmer collectives. SBI would like to create a strong foothold in this space by leveraging on partnership tie-ups, on one hand, for customer reach while extending the superior finance product designing capabilities of SBI to our partners. This will create synergies at operational level.”
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