Providing credit to low income people especially in the Agri sector is always being seen as unviable in India. The scale that the Microfinance model has achieved, demonstrates the ability to replicate an approach that has made small credits available to excluded markets as well as households. Small land holders have limited access to formal financial sources and the information asymmetry leads them to choose more traditional and informal sources of credit. Consequently, they are forced to sell their produce during the harvest season, at lower prices.
Despite various efforts by the stakeholders in this area, there continues to be huge demand-supply mismatch in financing these value chains and enterprises, due to the fractured and unorganized nature of the Agri value chain and its players. This lack of information and other factors portrays a very blurry picture about the Agri finance sector. Financial institutions can cope up with these challenges by leveraging relationships between suppliers & buyers hence making these value chains more effective and sustainable.
Samunnatis’ understanding of these value chains is very proficient and deeply rooted, hence processes become simpler and more scalable. These relationships can be better nurtured by tapping more information about the value chain players, study their exact needs and customize solutions accordingly in order to provide a more suited financial and non-financial assistance.