About 50 per cent of India’s workforce is employed in the agricultural industry, which contributes about 13.7 per cent of India’s GDP.
It is ironical that a sector which forms such an important part of our economy is stricken with crisis triggered by farmer suicides because of debts.
This is where the booming fintech sector in India is upping its game and spreading its roots to the deepest corners of the country. Realizing the opportunity that exists in both the sectors, entrepreneurs are developing fintech products through integration that will help farmers.
Entrepreneur India takes a look at the top 5 ways in which financial technology institutions are helping farmers:
Instant Loans for Farmers
Since long, farmers have been dependent on middle men or money lenders for cash. Post demonetization, with the shortage of cash in the country, farmers’ crisis became national news. With the non-existence of the middlemen and non-cooperation from banks, farmers didn’t know where to go. This is where NBFCs and alternative lending platforms came into the picture. With little or no back and forth, these institutions are enabling farmers to borrow from them.
Say Goodbye to Middlemen
Indian farmers face majority of their problems at the hands of middlemen or the ones who connect them to the buyers. These middlmen often commit fraud or dupe farmers.
Often, these middlemen sell farm produce at a low rate. But now, there are many platforms like Catalyst Labs, which connect farmers directly to their buyers on a mobile platform doing away with the need to involve middlemen. The platform has a network of buyers and thus, farmers can then negotiate with the bulk buyers. BigHaat is another start-up that works as an agri-commerce platform that helps farms sell their products online.
Acquiring equipment and products for farming is not an easy task for farmers. Buying equipment is expensive for them and they end up taking loans beyond capacity to pay back. Coming to their rescue, start-ups offer them the pay-per-use rent model. EMI3 Agri, a start-up that offers farming-as-a-service, rents out state-of-the-art agricultural equipment at affordable rates to farmers.
Financial Inclusion in Farming
Financial inclusion basically means offering financial services at affordable or lower costs. Globally, many start-ups are making way for financial inclusion for farmers by giving them insights in finance. These start-ups make use of Artificial Intelligence and Machine Learning to forecast data and help reduce risk.
For farmers, one of the biggest worries is the loss of crop land or wastage of crops due to an unprecedented natural disaster. Crop insurance thus, plays an important role in the agricultural industry. With demand for InsurTech rising in the country, crop insurance, too, has caught the fancy of start-ups. Mobbisurance is one such start-up that offers affordable insurance to farmers while using satellite technology to insure them against weather risks. Also makes it conveniently available on the phone.