Identifying gaps and driving efficiency in the digitization of agri-financing infrastructure in India

Abstract

As per the RBI reports, the total agriculture outstanding for Scheduled Commercial Banks stands at ₹ 13694.56 billion in 2017-18. The share of institutional credit is increasing with every passing year. Digitization of land records, ease of accessibility of credit and increasing awareness amongst the farmer along with a push from government schemes played a significant role in increasing the reach of institutional credit in India. However, the percentage household covered under institutional credit are less than the percentage outstanding under institutional credit. Inadequate access of institutional credit to small and marginal farmers may be one of the reasons for the same. the quantum of crop loan is higher and increasing as compared to the investment credit. This reflects the fact that most of the institutional lenders are averse of credit exposure in investment credit. It provides an immense potential for the lender to tap into the investment credit opportunity within Agri-finance space. The aim of this project is analysing the current digital infrastructure for Agri-credits facilities, identifying the key existing gaps in the supply of Agri-credits to farmers and exploring the possible tech-enabled solutions to enhance the efficiency of Agri-financing in India.