Digital Tools for Agricultural Financing

Over a 14-month pilot phase, the RBI’s Unified Lending Interface (ULI) has enabled disbursal of ₹27,000 crore across 6 Lakh loans. RBI has got whacked in press on multiple occasions in 2024 — it is their job as a regulator to monitor & act. But, the RBI has taken on one additional role — to innovate: (1) Back in August 2019, RBI launched the framework for a regulatory sandbox - The idea of the sandbox was simple: Provide problem statements, invite the private sector & find the common ground b/w regulation <> innovation. - In Nov ‘19, the 1st cohort of applicants was invited for the retail payments innovation. - Cohort no.2 was focused on cross-border payments innovation (2) In March 2022, RBI incorporated RBIH (RBI Innovation Hub) - This is a standalone Section 8 company i.e. Not for Profit (like ONDC) - RBI provided a dedicated ₹100 crore corpus for this entity (3) In June 2024, RBI launched Finquiry i.e. an open house discussion - From 3PM to 5PM on last working Wednesday of each month. - Location: FinTech Dept, RBI office in Mumbai. 💡ULI is the new name given to the “Public Tech Platform for Frictionless Credit” project. The pilots for this project began back in August 2023 with a focus on 2 problem statements: (a) KCC (Kisan Credit Card) lending digitization (b) Cattle financing digitization 🧠For small PSL (priority sector loans), esp. in agri, the processing cost of the loan can be as high as 5% of the disbursal and TAT can take 4-6 weeks (Ouch, ouch). For regular loans, this is < 1.5% i.e. small PSL is a low ticket size | high cost product — hence not attractive to lenders. ✅Via ULI, for the KCC product, there is now a end-to-end digital journey for ≤ ₹1.6 Lakh ticket size loans (i.e. the no collateral limit of the KCC scheme). A 6 week TAT is now a 10 minute TAT. Per public sources, 36 lending institutions have gone live on ULI & the next product being piloted is short-tenure loans to gig workers (e.g. Swiggy delivery boys). ➡️ It seems like the “R” and “I” in RBI stand for Regulation and Innovation respectively. The best is yet to come. Very impressed to see RBI champion this project. #india

Tokenized Farmer Loans: A New Era of Agricultural Finance through EST AGRX EST AGRX is a next-gen agri-fintech platform pioneering tokenized crop credits, rural stock exchanges, and net-zero agri-solutions (EST Cnet0). EST AGRX has launched a tokenized lending scheme that converts farmer loans into digital assets. This innovative model secures lender capital, attracts high-net-worth individuals (HNIs), and offers insurance-backed protection through a strategic partnership with Talisman Insurance (USA). It marks a shift toward sustainable, decentralized, and risk-mitigated agricultural finance. 1. The Agricultural Loan Dilemma Smallholder farmers globally face high-risk debt cycles. Traditional short-term loans leave them vulnerable to climate shocks, market volatility, and crop failures. Defaults create stress for both farmers and banks, leading to rising NPAs and government bailouts. This outdated model: Imposes short repayment periods Lacks risk-sharing Increases financial stress Burdens public finances 2. EST AGRX's Five-Year Tokenized Loan Model Under the new scheme: Farmers receive 5-year loans via banks/cooperatives Farm land carbon credit acts as additional collateral. Loans are tokenized into blockchain-backed digital assets Tokens are sold to HNIs via EST AGRX Banks receive upfront capital, enabling fresh loan cycles 3. Securing Investor Confidence To attract and secure investors, EST AGRX has tied up with Talisman Insurance. Each token: Is backed by crop failure/disaster insurance Offers 14 -16% fixed or variable returns Becomes a low-risk, high-impact investment instrument Farmers benefit from longer loan terms, while investors enjoy insured returns. 4. Benefits for All Stakeholders Stakeholder - Key Benefits Farmer - Longer repayment, reduced pressure Lender - Upfront capital, reduced NPAs Investor - Secured, insured income assets Government - No need for bank recapitalization EST AGRX - Becomes an agri-fintech infrastructure 5. Token Economics & Circulation Token Value = Principal + Returns Smart Contracts trigger insurance claims, subsidies, and payouts Sinking Fund: Funded via subsidies, insurance claims, and crop sales for end-term repayment 6. Enabling Circular Agriculture The model promotes Rural wealth creation via decentralized finance. Transparent fund flows and subsidies. Integration with smart barter and carbon credit markets 7. Policy Potential This scheme aligns with Regenerative Finance (ReFi) and can be replicated globally: Scales across agrarian economies Attracts ESG-conscious investors Serves as a new parallel to sovereign agri-bonds 8. Farming the Future By aligning tokenization, insurance, and decentralization, EST AGRX has redefined agricultural finance; it doesn’t just fund the farm, it farms the future. “Tokenizing farm credit enables liquidity, risk transfer, and real-time transparency. EST is turning every farm loan into a wealth-creating opportunity rather than a liability.”

As part of the AgriStack initiative, for rolling digital farm lending in Uttar Pradesh for its eight crore farmers, the State government is currently working with the IFC - International Finance Corporation for providing APIs of the state’s land records & farm boundaries to SatSure & a couple of other companies. Bengaluru-based Space tech company SatSure provides satellite-based risk scoring & ratings reports at both farm & village level. It extracts patterns from satellite imagery using AI algorithms which can identify what crop is growing within a land parcel. It tracks changes in health, productivity, & provides insights on how these changes are related to climatic variables like rainfall, temperature, & humidity. These insights help banks understand the farmer’s income from the land & his ability to repay a loan. It also works with the Reserve Bank Innovation Hub (RBIH), credit rating agencies like TransUnion CIBIL Limited, & several large private sector banks like ICICI Bank & HDFC Bank. SatSure is not alone. Last week, Dhruva Space announced AstraView, a commercial satellite imagery service. AstraView provides end-users with high-resolution, multi-dimensional insights. This analytic-ready dataset increases operational efficiency, Dhruva said. It allows customers to search & order archived imagery or request for fresh collection of satellite data, ensuring they have access to both historical & real-time geospatial information. Users can use satellite imagery to optimise operations, & track environmental changes, without the complexity of traditional procurement methods. Prateep Basu, CEO, SatSure, told The Economic Times, that it is currently using open Copernicus programme data from the European Space Agency - ESA that is available every five days anywhere globally, & ISRO - Indian Space Research Organization's Bhuvan portal for land use maps as underlying layers to accurately delineate the croplands, fallows, & agro-forestry areas. “We have to access the digitised land records from different states, & there are several layers of complexity in delivering the satellite-based solution because we need to know where the land is & whom it belongs to," he added. A bank which is taking a farmer’s loan application, where they must submit information on the land’s location, can enter that information into SatSure's systems or their system (wherever APIs are integrated) & fetch the farm risk report at the land parcel level of the farmer. This saves them days of time & helps provide better services to farmers. Sanjay Nekkanti, CEO of Hyderabad-based Dhruva Space, also concurred that in agriculture, satellite imagery data enables precision farming by monitoring forests, crop health, soil conditions, predicting yields, & optimising resources for better productivity. Full story: https://lnkd.in/gR8sxt_f ETtech