Agritech firm Samunnati inks co-lending pact with IndusInd Bank for FPOs

Samunnati said it has entered into a co-lending agreement with IndusInd Bank to expand credit accessibility and market linkages for farmer producer organizations across the country

Agritech firm Samunnati on Thursday said it has entered into a co-lending agreement with IndusInd Bank to expand credit accessibility and market linkages for farmer producer organizations (FPOs) across the country.

In November 2020, the Reserve Bank of India (RBI) had issued guidelines on co-lending models between Scheduled Commercial Banks and NBFCs.

IndusInd Bank is among the first scheduled commercial banks to participate in such a co-lending programme aimed at mainstreaming FPOs as an asset class, Chennai-based Samunnati said in a statement.

This strategic alliance will enable easy access to working capital to Samunnati's growing network of 1,500 farmer collectives with a member base of 6 million farmers, it said.

Speaking on the development, Founder and CEO of Samunnati Anil Kumar SG said, Our collective goal with this alliance is to improve the flow of credit to the underserved agri community at an affordable cost, by leveraging the dual advantage of funds at a lower cost and Samunnati's extensive FPO network.

Srinivas Bonam from IndusInd Bank said, We see merit in FPOs as it is a best-fit model to help farmers pursue agriculture in a more effective and organized manner. This collaboration is in line with the bank's strategy to bring efficient and inclusive lending solutions."

While enabling timely credit to FPOs, the bank shall work together to help facilitate market linkages to FPOs, he added.

Samunnati has presence in more than 100 agri value chains spread over 22 states in India and has powered over USD 1 billion gross transaction value in its journey so far.