About 65% of India’s population depends directly or indirectly on agriculture for its livelihood. While the contribution of agriculture to India’s GDP is steadily declining, the sector continues to play a significant role in the overall socio-economic fabric of India.

Amongst the major factors that contribute to agricultural growth are increased use of proper agricultural inputs, technological interventions, agriculture credit, market information and intelligence, and agriculture extension. Out of these factors too, agriculture credit plays a crucial role in the changed scenario of a market led agriculture.

Although several initiatives have been taken in this direction such as priority sector lending, Contract farming etc., many of these initiatives have not significantly benefitted the small and marginal farmers. Formal institutional credit still remains out of bounds for these small and marginal farmers. This is largely due to their inability to produce a financial history or give a collateral. In order to enable these small and marginal farmers’ access to investments, technological advancements and efficient inputs and markets, Government of India has been promoting the formation of “Farmer Producer Organizations” (FPOs) with equal ownership and shareholding by the member farmers.

CDFI in collaboration with the National Agro Foundation (NAF) has developed a digital platform for FPOs and its stakeholders to link business, operational and financial activity and thereby address the challenges of financial inclusion and maximise cashless transactions.

The platform will:

  • Ensure agricultural business transactions are routed through the banking channels;
  • Minimize cash transactions where FPOs are involved;
  • Create a credible transaction history for farmers thereby enabling engagement between financial institutions and farmers;
  • Enable business entities or FPOs/Self Help Groups (SHGs)/Farmer Club Federations (FCFs) etc. to create records of their internal transactions;
  • Increase volume of banking transactions and keep accounts active;
  • Reduce dependence of rural farmer population on non-institutional sources of finance;
  • Rate the FPOs/SHGs/FCFs on credit discipline; and
  • Help stakeholders in proper and timely repayment of loans.