Guwahati: The agri-fintech sector in this nation is in its nascent stage, and for good reason. In a country where agriculturists remain at the bottom of the digital economy, it feels like an insurmountable challenge for startups. But therein lies the opportunity too: an under-developed sector means there is plenty of scope for development, and that is exactly what Farmeasy Technologies seeks to do.
The idea of the company and its agri-fintech platform, Farm Infinity (farm∞), started when co-founders Gunajit Brahma and Alok Ekka, friends and batchmates from IIM Indore, started discussing the real-world problem faced by the small and marginal farmers of the region in availing any kind of capital or financial services from Banks. The farmers end up taking loans from local money lenders at a very high rate. This subsequently leads the farmers into a debt trap, resulting in loss of land and extreme cases force them to commit suicide.
The team of Farmeasy Technologies consisted of the two co-founders, Alok and Gunajit, along with tech engineers, Ram Munda and Kaustav Gayon. Senior industry leaders like Dr. Samir Baruah, retd. Corporate Banker, and Vinay Peshwa, CEO of Maxsimos Techsoft & ex-Infosys has joined the company as Advisors.
Alok and Gunajit wanted to address this issue of the financial stress of farmers, thus, Farm Infinity was born to facilitate easy access to affordable financial services for smallholder farmers and agribusinesses of India.
In February 2020, the company was incubated with Assam Startup (NEST), Guwahati in the second month of inception. Also, they received a Grant for Idea to PoC, from the Govt. of Assam.
"Since inception, we have closely worked with the smallholders' farmers, onboarded 5 Farmer Collectives (FPC) of Assam, with a total of about 2500 farmers, and have access to over 30,000 livestock," said the founders.
Farmeasy Technologies is the first company in the entire Northeast to come up with an Agri-fintech solution for the agriculture community. There are other agri-fintech companies in India, but most of them are in the Metros and Tier-1 cities.
The company has developed a mobile app "Farm Infinity", available in Google Playstore - which is accessed by the FPCs or field agents to collect field data of each farmer and it does real-time digital KYC verification of the loan applicant.
"We have collected sample data of farmers from Assam, analysed and developed a proprietary algorithm that determines the creditworthiness and financial eligibility of the farmers, by assigning a credit score to them." the founders added.
The company's potential has now started attracting investors too. Last week, the company raised an equity round from an HNI, Mr. Hemanta Narzary, retd. IAS officer. Even as we deal with the pandemic, the company has managed to work closely with smallholders farmers and has onboarded 5 Farmer Collectives (FPC) of Assam with a total of about 2500 farmers, and have access to over 30,000 livestock.
Explaining how the company works, the founder says, "We have developed a mobile app "Farm Infinity", available in Google Playstore - which is accessed by the FPCs or field agents to collect field data of each farmer and it does real-time digital KYC verification of the loan applicant. We have collected sample data of farmers from Assam, analysed and developed a proprietary algorithm that determines the creditworthiness and financial eligibility of the farmers, by assigning a credit score to them."
The company has also developed a Digital Dashboard, which is their "frontend application for our end-users, primarily Banks, NBFCs, MFIs and insurance companies (BFSI sector) while the beneficiary of our solution will be the farmers and agribusinesses."
The main benefits of their solution are:-
Easy Access – Digital platform/mobile application based online form that can be directly filled by a Farmer or any educated youth (man/woman) known to the farmer. Future features will include multilingual/ vernacular language form.
Data Driven – Our platform captures individual as well as farm data of each farmer. Such data is useful to provide agronomy & agro-economical estimates as well as a future prediction on market price, produce availability, and/or fertiliser/pesticide demand.
Affordable Financing – Instead of the high interest loan, charged by conventional banking sector, the company plans to provide affordable loan and insurance options to onboarded Farmers and Farmer collectives.
Reduced NPAs – The proprietary algorithm developed by the company automates the risk assessment and analyse the creditworthiness and financial capability of the farmer, & provides a proprietary Scorecard report to the partnering Banks/NBFCs/MFIs. It acts as an alternative scoring model to identify potential NPAs.
"Most of our competitors provide cash credit and credit against stock, through the partnering banks, while our model can be used to provide financial services, which also takes into account the future income of the farmer, based on their cultivation and harvesting data. Unlike us, none of the other companies in this segment has implemented any scoring model or have developed proprietary algorithms, to truly assess and determine the financial capabilities of the Farmers," said the founders when asked how their company is different from the competition.
The ongoing pandemic has impacted the company's on-field operations, but "since our solution is digital, it can be used by the farming community remotely and we can help promote and facilitate financial inclusion among the rural community," the founders say.
In Assam, the company's potential clientele includes the regional and commercial banks (35 nos), NBFCs (5 nos), 30 MFIs, and the various general insurance companies doing crop and livestock insurances.
The company intends to file patent(s) for the unique method of deriving the credit eligibility of farmers from the farmer's data as well other alternate farm data, which gives the true potential of the farmer. "We are factoring over 80 individual parameters, 600 data-sets and over 10Mn data from Govt. database. This will help the current lending system to better evaluate their farmer customers and help improve the agriculture portfolio," the founders added.
"With our recent round of funding, we plan to patent our proprietary algorithm and the credit scorecard, which will be the first of its kind in India, that in the future, can benchmark the estimation of Creditworthiness of Farmers," say the founders.