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Mainstream financial institutions limit access or does not provide financing for post-harvest operations of farmers, especially small producers and small landholders. These small producers largely depend on intermediaries for enabling market access or have now begun the process of forming a Farmer Producer organization. Being in the first part of its institutional journey has limited scale and largely depend on market intermediaries to connect with bulk buyers. This product attempts to provide funding and liquidity support to enable smoother operations and market linkages.

Some Key features of the product are;

1. Facilitating post-harvest finance to small farmer through intermediaries like produce aggregators in the value chain.
2. These produce aggregators serve as market intermediaries for small producers , enabling their better access to market, supporting better prices and realisation, besides bringing transparency in value chain operations.
3. Provides loans to market intermediaries – by thecationhypo underlying receivables and thus enabling bridge finance to primary producers.

Interest rates on loans

Borrower Category Tenure Interest rate (%) Processing fees GST Penal Charges
Institutions Maximum of 120 days 14.00% 1% of sanctioned amount 18.00% of processing fee Nil

 

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