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The role of NBFCs in shaping rural credit access

October 16, 2025

Access to reliable rural credit is vital for India’s agricultural productivity, rural livelihoods, and inclusive growth. In areas where commercial banks are scarce, Non-Bank Financial Companies (NBFCs) are rapidly emerging as critical providers of credit, adapting their models to meet the unique challenges of remote and small-scale borrowers.

Why NBFCs matter for rural credit?

NBFCs offer flexibility, speed, and product innovation tailored to the needs of farmers and rural micro-entrepreneurs. Because of their lighter infrastructure and ability to work through field agents, partner organisations (such as Farmer Producer Organisations or Self Help Groups), and use alternate data, NBFCs reduce transaction costs and delays — two major obstacles for many seeking rural credit from traditional banks. For instance, in FY 2024–25, fintech NBFCs sanctioned approximately 10.9 crore personal loans amounting to ₹1,06,548 crore, a scale that has brought formal financial access to many who previously depended on informal sources.

NBFCs + Microfinance: A credit accelerator

Microfinance NBFCs (NBFC-MFIs) are a fundamental source for supplying credit to small borrowers. As of 30 June 2025, the microfinance industry’s outstanding portfolio stood at about ₹3.07 lakh crore, supporting some 10 crore active loans with around 6 crore unique borrowers — many in rural areas with limited formal credit options. Moreover, in FY 2024–25, nearly 80% of microfinance loan books of NBFCs were from rural India, indicating a strong shift toward serving underserved borrowers.

Product innovation & improved quality of rural credit

NBFCs are not just increasing reach — they are improving the type of rural credit on offer. Examples of innovations include small-ticket credit for crop inputs, loans against warehouse receipts, pump-set financing, seasonal working capital aligned with harvest cycles, and two-wheeler financing for last-mile connectivity. NBFCs are also shortening approval times through remote onboarding and leveraging mobile or digital payments.

Partnership models are also key: NBFCs are co-lending with banks, entering into ATL (Agri Term Loan), WHR , FPO Financing, Cattle Financing with agri-firms, and working with FPOs/SHGs to build trust and reduce risk. These models help tailor credit products in rural areas that reflect local crop cycles, rainfall variability, and seasonal incomes.

The broader context: Institutional credit & NBFC opportunity

Institutional credit to agriculture has more than doubled since 2014-15. For 2024-25, the official target for agri-credit was set in the range of ₹25-28 lakh crore, showing that government policy recognises the need for scale. NBFCs and MFIs are well-positioned to complement this push by reaching borrowers in areas with limited bank presence.

In regions where banks are sparse, NBFCs drive credit access; for example, the fintech NBFCs’ disbursals of over ₹1,06,548 crore via 10.9 crore personal loans in FY 2024-25 have helped many rural households move into the formal financial system.

Challenges & regulatory considerations

Scaling rural credit via NBFCs is not without challenges. Rural lending is exposed to climatic risks, commodity price fluctuations, and uncertainty in repayment cycles. NBFCs often face higher funding costs than banks, which may raise interest rates for borrowers. Ensuring consumer protection and transparent terms is essential, particularly for new borrowers with limited financial literacy.

Regulators have begun addressing these through co-lending guidelines, district-level credit plans (PLPs), and efforts to extend grievance redressal channels in rural areas. The goal is to ensure that rural credit remains accessible, affordable, and does not lead to overindebtedness.

The way forward: Scaling responsible rural credit

To build on the gains so far, NBFCs should:

Deepen partnerships with NABARD, banks, FPOs, and SHGs for last-mile delivery.

Use data-driven underwriting (e.g., using satellite imagery, payment histories, supply chain flows) to better assess risk in rural settings.

Offer bundled services — insurance, crop advisory, and digital payment/income smoothing tools — to improve borrower resilience.

Align loan tenors and repayment schedules with seasonal rural income flows so that credit is not burdensome during lean periods.

With rural areas contributing about 80% of NBFC microfinance loan books in FY 2024-25, and with the microfinance portfolio outstanding at ₹3.07 lakh crore supporting 10 crore loans, NBFCs are clearly playing an expanding role in formalising rural credit delivery. If these efforts are guided by responsible lending, NBFCs like Agriwise Finserv can help transform how rural India accesses finance — enabling innovation, investment, and sustainable growth.

The rise of sustainable agriculture finance in India!

October 09, 2025

Sustainable agriculture is no longer a niche aspiration — it’s becoming central to how India funds its food future. As climate risks, soil degradation, and market shocks intensify, financiers, policymakers, and farmers are shifting capital toward practices that increase productivity while protecting ecosystems. This transition is evident in the rise of green debt markets, the expansion of agricultural credit, and the introduction of new public schemes designed to support climate-resilient farming.

Why is sustainable agriculture finance necessary now?

India’s farm sector supports nearly half the workforce but faces mounting stress from extreme weather and input-cost inflation. Financing models that reward water-efficient irrigation, regenerative soil management, agroforestry, and renewable energy on farms reduce long-term risk for both lenders and producers. Between FY2020-21 and FY2021-22, tracked financial flows into activities the Climate Policy Initiative classifies under sustainable agriculture averaged about ₹22,393 billion (≈USD 301 billion) per year, a clear sign that both public and private money are already moving into sustainability-aligned uses.

Public support + Private capital: A blended push

Public budgets and banks remain the backbone of agricultural finance in India, but the composition is evolving. Government budget allocations and public sector undertakings supplied roughly one-third of those sustainable agriculture flows in the CPI study, while commercial financial institutions provided the lion’s share of private debt. This mix matters: public programmes de-risk new technologies, enabling private lenders to scale loans for solar pumps, precision inputs, and storage that reduce post-harvest losses.

At the same time, India’s broader green debt market is growing. As of December 2024, India’s cumulative aligned green, social, and sustainability (GSS+) debt reached approximately USD 55.9 billion, marking a rapid expansion that creates opportunities for climate-smart agri projects to tap into institutional investors seeking impact, as mentioned in the Climate Bonds Initiative’s 2024 report.

Agricultural credit at scale and shifting in quality

Access to credit is improving in absolute terms: ground-level agriculture credit hit about ₹19.28 lakh crore by December 31, 2024, against a FY25 target of ₹27.5 lakh crore, demonstrating banks’ willingness to provide large volumes of farm finance. While much of this remains short-term crop loans, regulators and development banks are nudging a portion of flows toward longer-term, sustainability-oriented lending such as watershed investments, on-farm renewable energy, and warehouse upgrades that enable better price realisation for farmers.

NABARD and other development institutions play a central role: their credit planning and refinance windows help scale innovations at the last mile, pairing technical assistance with concessional finance to make sustainable agriculture practices bankable.

Policy levers accelerating sustainable agriculture finance!

Two policy trends are particularly catalytic!

First, India’s draft climate finance taxonomy provides a framework to classify and direct capital toward low-emission and adaptation activities — including many agri investments — thereby reducing greenwashing and clarifying which projects qualify for “green” finance.

Second, recent budgetary increases and targeted schemes for climate-resilient agriculture signal sustained public intent to subsidise transition costs for smallholders. Together, these measures improve investor confidence and create standardised pipelines for sustainable agriculture projects.

Agriwise: Enabling sustainable agriculture through green finance

Agriwise is leading this transition with enabling farmers and agri-enterprises to access finance that supports eco-friendly practices. The company offers solar loans that empower farmers to transition from diesel-based irrigation to renewable energy, thereby significantly reducing fuel costs and carbon emissions.
Beyond solar financing, Agriwise provides structured warehouse receipt finance and customised working capital solutions for agribusinesses adopting sustainable models. By aligning credit products with long-term sustainability goals, Agriwise ensures that farmers not only secure capital but also build climate resilience. Its approach demonstrates how financial innovation can make sustainable agriculture both profitable and scalable across India’s diverse agri value chains.

Challenges & where opportunity lies!

Despite momentum, gaps remain. The CPI analysis highlights that domestic commercial banks account for most private sustainable agriculture finance due to priority-sector lending obligations, which can mask genuine market-driven investments and leave project-level green finance underdeveloped. Data limitations also make it hard to track the exact end-use of many loans, complicating impact measurement. Overcoming these hurdles — through stronger reporting standards, blended finance instruments, and aggregation vehicles for smallholder projects — would unlock institutional capital on a larger scale.

What does this mean for lenders?

For agribusinesses and lenders, the practical steps are clear: (1) structure products that link credit terms to measurable sustainability outcomes (soil health, water savings, emissions reduction); (2) use blended capital to lower first-loss risks for pilots; and (3) invest in data and verification to prove impact. For farmers, access to affordable loans for drip irrigation, bio-inputs, on-farm solar, and quality storage can raise yields and buffer climate shocks — making sustainable agriculture both a resilience strategy and a business proposition.

Conclusion

India’s shift toward sustainable agriculture finance is already underway, as evidenced by substantial tracked flows, expanding green debt markets, and rising agricultural credit targets. The next phase will require standardisation, better measurement, and creative finance structures that align farmer incentives with long-term ecosystem health. If policymakers, lenders, and agribusinesses coordinate effectively, sustainable agriculture can transition from a policy slogan to a mainstream investment that secures incomes, food supplies, and the environment for decades to come.

Collateral-free loan options for MSMEs in the Indian agri value chain

October 05, 2025

For MSMEs operating in the agricultural value chain—whether input suppliers, aggregators, processing units, cold storage operators, or rural logistics providers—access to credit without requiring collateral is a game changer. Collateral requirements often act as a barrier for smaller agribusinesses that lack land title or real estate. In 2025, a growing number of collateral-free loan schemes and guarantee-based instruments are opening the door to more inclusive finance across agribusiness segments.

Why collateral-free loan matters for agri MSMEs?

Agriculture and its allied activities remain capital-intensive and seasonally cyclical. In India alone, the total farm credit target for FY 2025–26 is projected at around ₹31–32 lakh crore. Yet, many agri-value MSMEs struggle to convert growth potential into scale because they can’t meet collateral demands. A collateral-free loan reduces entry barriers and promotes innovation, especially in areas such as post-harvest handling, food processing, cold chains, farm machinery leasing, and rural aggregation.

Further, the intensifying push for financial inclusion and rural development is prompting regulators and the government to expand guarantee schemes and concessional credit. For example, as of April 1, 2025, the Government of India has enabled collateral-free loans of up to ₹10 crore under certain categories, with guarantee coverage of up to 90%. This move signals a strategic tilt toward enabling MSME financing without the friction of security liens.

Key collateral-free loan schemes and programs in 2025

Credit Guarantee Schemes (CGTMSE / MSME Guarantee Funds): The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) enables unsecured term or working capital loans up to ₹1 crore per borrowing unit. For agri processors or cold storage operators seeking expansion, CGTMSE-backed loans can be a strong option.
Collateral-free agricultural credit (RBI / KCC / MISS): In December 2024, the Reserve Bank of India raised the limit for collateral-free agricultural loans from ₹1.6 lakh to ₹2 lakh per borrower, effective January 2025. Similarly, the MISS (Minor Irrigation and Allied Support Scheme) limit was enhanced from ₹3 lakh to ₹5 lakh, enabling small-scale agri entrepreneurs to access funds for pumps, drip irrigation, or allied projects.
MUDRA loans / Unsecured business loans: Under the Pradhan Mantri MUDRA Yojana (PMMY), micro enterprises can receive unsecured loans up to ₹10 lakh. This suits smaller MSMEs in packaging, logistics, and rural processing.
Joint Liability Groups (JLGs) and SHGs: Group lending models continue to support rural enterprises by leveraging shared responsibility instead of collateral. MSMEs tied to Farmer Producer Organisations (FPOs) can use JLG structures to access unsecured loans collectively.
Scheme-based enterprise development loans: Several government MSME development programs provide unsecured loans up to ₹3 lakh for micro enterprises along with capacity-building and infrastructure support.

The Agriwise advantage

While government and institutional schemes are widening access to collateral-free loan, MSMEs in the agri value chain often need customised lending solutions that reflect the realities of agriculture. This is where Agriwise Finserv, the NBFC arm of StarAgri, steps in:

Farmer Scorecard & AgriBhumi integration: Lending decisions are backed by satellite-verified land intelligence and credit profiling, ensuring that even smallholder farmers and MSMEs get fair access to finance.
Quick turnaround: With tech-driven processes, Agriwise ensures faster approvals and disbursements, a vital edge in time-sensitive agri cycles.
Supply chain financing: Agriwise supports not just farmers but also input suppliers, aggregators, and processors, enabling smooth flow of working capital across the agricultural value chain.

By combining multiple loan products with data-backed assessments, Agriwise is empowering MSMEs and smallholders to scale sustainably without being excluded from formal finance.

Challenges & risks to mitigate

Higher interest rates: Unsecured loans can be priced higher due to risk exposure.
Guarantee fees: Some schemes add a cost layer in the form of guarantee fees.
Loan size limitations: Many unsecured options are capped, requiring blended approaches for larger needs.
Awareness gaps: Rural MSMEs often remain unaware of these schemes and rely heavily on intermediaries.

Conclusion

A collateral-free loan is emerging as a powerful enabler for MSMEs in India’s agri value chain. With policy reforms, guarantee coverage, and fintech-led innovations, 2025 marks a turning point for unsecured agri financing.

For MSMEs, the right strategy is to blend institutional schemes with sector-specialised lenders like Agriwise. By doing so, they can gain access to timely, collateral-free working capital and trade finance—unlocking new avenues for scaling operations, strengthening value chains, and driving rural economic growth.

How does warehouse receipt finance help farmers unlock working capital?

September 24, 2025

In India’s agricultural economy, cash flow challenges are one of the biggest barriers for farmers, especially smallholders, in accessing inputs, waiting for good market prices, and avoiding distress sales. Warehouse receipt finance (WHR finance) has emerged as a powerful tool to enable farmers to convert stored produce into working capital, improve bargaining power, and reduce risk.
But how does warehouse receipt finance work? Let’s explore the current status in India, benefits and challenges, and how Agriwise is helping farmers access commodity finance via warehouse receipt systems.

What is warehouse receipt finance?

Warehouse receipt finance refers to a financial arrangement where farmers deposit their agricultural produce in approved warehouses and receive a warehouse receipt (physical or electronic) that acts as collateral to obtain a loan or loan‐equivalent financing. Because the produce is stored under regulated conditions, the receipt assures both the lender and borrower about quality, quantity, and storage integrity.

In India, with the advent of e-NWR (electronic Negotiable Warehouse Receipts), warehouse receipt finance India has become more formalised, efficient, traceable, and scalable.

According to data published on the WDRA portal, the country’s active regulated warehousing capacity as of the end of March 2025 is approximately 44.8 million tonnes. In 2023-24, India produced ~330 million tonnes of food grains, but only about 1.24 million tonnes have been financed using warehousing / e-NWR instruments.

How does warehouse receipt finance help farmers?

Here are the ways in which WHR finance (often a subset of wider commodity finance for farmers) can make a difference:

Avoiding distress sales & price timing: Farmers often have to sell produce immediately after harvest when supply is high and prices are low. By using WHR finance, they can store produce under good conditions, obtain liquidity via the receipt, and sell when market conditions improve.
Higher bargaining power: With the ability to hold produce, farmers aren’t forced sellers. They can wait for better demand, possibly export markets, better MSP, or private buyers who pay premiums for quality. The formal system of such finance in India (primarily through e-NWR) improves trust in the quality and condition.
Reduced post-harvest losses: Warehouses registered under WDRA and collateral managers ensure quality, pest control, good storage practices. When produce is stored properly, spoilage reduces, so less loss, better quality, which fetches higher price. WHR finance makes storing financially viable.
Improved access to formal finance: Receipt acts as collateral; banks, NBFCs more willing to lend against regulated receipts. This is especially critical for small/marginal farmers who often lack land or other strong collateral. Commodity finance for farmers can be more inclusive via WHR finance.
Better cash flow & working capital: Input purchases (seeds, fertilisers, labour), paying workers, transportation—all need working capital. By converting stored produce into cash via credit, farmers can plan, invest in inputs, improve yield, rather than relying on informal (often more expensive) borrowing.
Risk mitigation (price, weather, market): Storage plus delayed selling helps farmers mitigate risk of price drop. Also, some financial schemes are linked with insurance or regulated storage, so the risk of spoilage or theft is lower.

What needs to improve?

While warehouse receipt finance has strong potential, several challenges hinder its full deployment:

Low awareness and adoption among small farmers about e-NWR and WHR finance mechanism.
Insufficient number of registered/regulatable warehouses, especially close to production centres. Logistics cost is high; many warehouses do not meet regulatory or quality standards.
Operational costs, documentation, and collateral valuation complexities; lenders may perceive risk due to storage, quality, warehousing fraud.
Price volatility and shelf life constraints of some commodities: some perish quickly, so storage + loan tenure may not match.
Regulatory & policy barriers: though WDRA is pushing regulation, more clarity, standardised processes, better infrastructure, and stronger guarantee schemes are required.

Agriwise & its role in facilitating warehouse receipt finance

Agriwise, as part of StarAgri’s platform ecosystem, plays a pivotal role in bridging the gap between farmers, warehouses, and financiers. Here’s how Agriwise helps:

Offering warehouse receipt financing services: Agriwise Finserv provides financing to farmers by accepting electronic warehouse receipts (e-NWRs) or other approved warehouse receipts as collateral, enabling access to working capital without forcing immediate sale.
Linking with registered warehouses & collateral managers: Agriwise ensures that warehouses used meet regulatory requirements (e.g. WDRA registration), which raises lender confidence and assures quality of stored commodities.
Leveraging commodity finance for farmers: Through its network and partnerships, Agriwise facilitates commodity finance for farmers, not just via loans but also via advisory and market linkages, helping farmers decide when to sell for best returns.
Technology & transparency: Use of digital platforms, real-time tracking, and valuation tools helps in credible issuance of warehouse receipts. Transparency in storage conditions, quality checks, and valuations improves lender and farmer trust.
Education & capacity building: Agriwise provides training, information & awareness to farmers about the benefits of warehouse receipt finance, documentation required, storage quality, and risk mitigation. These reduce friction in adoption.

Policy & institutional support in India

To support and scale up warehouse receipt finance, the following institutional & policy supports are important (some already underway):

WDRA is regulating warehouses to make them eligible for e-NWR and building a framework for negotiable receipts.
Government guarantee schemes provides over 50% loan‐to‐value and applies credit guarantee for e-NWR based pledge financing.
Efforts to expand warehousing network: India aims to reduce post-harvest losses via scientific storage. Over 100,000 warehouses identified or being brought into regulatory fold.
MSP increases and stable procurement policies allow farmers to be more confident of selling if they wait; storage plus finance is more effective under such stable procurement frameworks.

What’s the best farmers can do?

Farmers looking to use warehouse receipt finance should consider:

WDRA warehouses: Using warehouses registered with WDRA or recognised collateral managers, so receipts are valid and lenders accept them.
Understanding loan terms: loan-to-value ratio, tenure (often limited by the shelf life of the commodity), interest rates, repayment schedule.
Ensuring proper quality: moisture, grading, packaging; as quality defects reduce value.
Monitoring storage costs and fees: warehousing and handling costs can eat into profits.
Timing the market: balancing storage costs vs price rise; sometimes selling earlier may be better, in other cases waiting yields more.
Using Agriwise or similar service providers: for advice, tech platforms, and connections to financiers.

Conclusion

Warehouse receipt finance is a key instrument in unlocking working capital for farmers in India, enabling them to store produce, access formal credit, and sell under favourable conditions. While uptake remains modest relative to the scale of India’s agricultural production, policy momentum, regulatory frameworks like WDRA, and service providers such as Agriwise are helping overcome obstacles. For commodity finance for farmers to truly reach its potential, awareness, infrastructure, transparency, and trust are critical.

As Agriwise continues to invest in building capacities, integrating technology, and facilitating credible warehousing and finance linkages, more farmers will benefit from warehouse receipt finance, unlocking capital, improving incomes, and building resilience in India’s agricultural sector.

Disclaimer

The content published on this blog is provided solely for informational and educational purposes and is not intended as professional or legal advice. While we strive to ensure the accuracy and reliability of the information presented, Agriwise make no representations or warranties of any kind, express or implied, about the completeness, accuracy, suitability, or availability with respect to the blog content or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. Readers are encouraged to consult qualified agricultural experts, agronomists, or relevant professionals before making any decisions based on the information provided herein. Agriwise, its authors, contributors, and affiliates shall not be held liable for any loss or damage, including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from reliance on information contained in this blog. Through this blog, you may be able to link to other websites that are not under the control of Agriwise. We have no control over the nature, content, and availability of those sites and inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them. We reserve the right to modify, update, or remove blog content at any time without prior notice.

Agri finance options in India: Which one suits your agribusiness?

September 17, 2025

India’s agriculture is evolving rapidly, shaped by inflationary pressures, climate challenges, and shifting policy priorities. Choosing the right finance options for your farm or agribusiness is now more crucial than ever. This article highlights the leading agri finance solutions—what they offer, who benefits most, and how Agriwise helps you identify and access the right fit for your needs.

Why does good agriculture finance matter?

Agriculture contributes about 16% of India’s GDP (as of FY 2024-25) and supports nearly 46% of the population. Yet one of the challenges remains access to sufficiently tailored agriculture credit or agriculture loan schemes, especially for smallholders. If you choose wrong, cost of capital drains profit; if you choose right, it can boost productivity, reduce risk, and raise incomes.

Key finance options available in India

Here are the main types of finance options you can consider, depending on your agribusiness size, purpose, and risk profile.

Other supportive elements: subsidy, working capital, policies

Agricultural subsidy schemes like input subsidy, fertilizer subsidy, electricity subsidy for pump sets etc still form part of farm finance. These reduce the effective cost of agriculture finance.
Agricultural working capital loans cover ongoing costs; many agriculture loan schemes provide for working capital (via KCC, crop loans, or MSME lines).
Government schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) provide risk coverage for crops. Budget 2025-26 allocated ₹69,515.71 crore from 2021-22 to 2025-26 for PMFBY & Restructured Weather Based Crop Insurance Scheme.

Choosing the right finance option

To decide among finance options, consider:

Your financial need: Are you funding inputs for one crop cycle (short-term), investing in infrastructure, or managing working capital for processing?
Your business entity & scale: Small/marginal farmers vs Farmer Producer Organisations (FPOs) vs agribusiness/processing firms.
Collateral and risk: Do you have collateral (Commodity, fixed assets), or only produce receivables? What risk are you taking (price, weather, market)?
Cost of finance: Interest rate, fees, moratorium, repayment schedule. Subsidised rates (crop loan, KCC) vs more commercial rates (invoice discounting, MSME).
Support & guidance: Navigating documentation, schemes, subsidies etc.

Agriwise offerings that help

At Agriwise, we offer services/products aligned to these finance-options to ease your journey:

Tailored agribusiness loan advisory: We help assess which agriculture loan or agribusiness loan suits your scale and purpose.
Assistance in obtaining crop loan: guiding documentation, eligibility, repayment options.
Facilitation of warehouse receipt finance: identifying licensed warehouses, helping you pledge produce to get credit.
Support for MSME loan applications and invoice discounting arrangements for agribusiness clients.
Linking farms with solar financing and subsidy programmes to reduce operational cost and enhance sustainability.

Summary: Which finance options suit your agribusiness?

If you are a small or marginal farmer needing funds for one crop cycle → crop loans / KCC / farmer loan with subvention or subsidy, low cost.
If you are selling produce post-harvest and need liquidity → warehouse receipt finance, avoid fire-sale prices.
If you’re an agribusiness/processor needing working capital for receivables or raw material input → invoice discounting / commodity finance / MSME loan.
If you’re building storage, cold chain or value-addition infrastructure → agriculture infrastructure loan under AIF or similar.
If you want to reduce recurring input cost / energy cost → solar financing + subsidy.

Conclusion

There is no one-size-fits-all when it comes to agriculture finance. The best finance options depend on your operations, cash flow, scale and risk appetite. With the right mix of agriculture credit, helpful agricultural subsidy support, and working with providers who understand the sector, your agribusiness can grow sustainably.
Agriwise is here to help you pick, apply and manage the right mix of agriculture loan, agribusiness loan, working capital, and funding solutions so your farm not only survives, but thrives.

Disclaimer

Solar loans for agriculture & MSMEs: Pay less, save more!

September 11, 2025

Agriculture and MSMEs across India are turning to renewable energy to cut costs, increase productivity, and achieve sustainability. A solar loan allows farmers and small businesses to invest in solar energy systems—like rooftop solar, irrigation pumps, and other installations—without the hefty upfront cost. Thanks to favorable interest rates, subsidies, and flexible repayment structures, these solar loans are reshaping the financial landscape for agriculture and MSMEs in 2025.

Why choose a solar loan?

Huge cost savings: With rising electricity tariffs and unpredictable diesel prices, switching to solar via a solar loan can slash monthly energy bills by nearly half for farms and businesses.
Access to subsidies and schemes: Government-backed Solar Loan Schemes in India—such as the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM)—offer attractive subsidies for farmers installing solar pumps. Likewise, MSMEs can access Solar Loan Subsidy India programs for rooftop and off-grid solar systems.
Rapid return on investment: The payback period often ranges from 3 to 5 years thanks to lower utility costs and high solar irradiation, especially in regions like central and southern India.

Types of solar loans available

Solar loans for agriculture: Agricultural producers can finance solar-powered irrigation systems through the solar irrigation pump loan. These loans are frequently bundled with schemes like PM-KUSUM and other agricultural solar financing initiatives. Farmers benefit from subsidized interest rates and better loan terms under solar loan scheme India offerings.
Solar loan for farmers India: Specifically tailored for India’s farming community, these packages support installation of solar arrays to power operations—reducing dependence on grid electricity and diesel. The combination of subsidy, credit-linked support, and financing makes farmers solar loan India an attractive option.
MSME solar loan & solar financing MSME: Small enterprises can access MSME solar loan or solar financing MSME products to install rooftop or ground-mounted solar systems. Financing terms typically cover up to 90% of project costs, with loans spread over 7–10 years. Businesses can use this to lighten their electricity burden and enhance profitability.
Rooftop solar loans & solar panel loan India: Rooftop solar adoption is soaring—and rooftop system loans powered by solar panel loan India or solar power loan India make installation more affordable. These loans help businesses and households structure payments that align with lower electricity bills, making clean energy installations more accessible.

Industry figures in 2025

As of April 2025, India’s installed solar capacity stands at 107.94 GW_AC, generating 144 TWh of electricity—up from 116 TWh in 2024. The National Solar Mission target of 100 GW was surpassed in January 2025. For agriculture, the RBI raised the collateral-free loan limit from ₹1.6 lakh to ₹2 lakh to improve access to credit.

On the household front, the Pradhan Mantri Surya Ghar Muft Bijli Yojana, launched in 2024 with a budget of ₹75,021 crore, will provide 1 crore households with rooftop solar and 300 free units of electricity per month. In addition, collateral-free rooftop loans up to ₹2 lakh at a subsidized 6.75% interest rate are available for systems up to 3 kW. Finally, the GST on solar devices has been cut from 12% to 5%, lowering project costs by nearly 5%.

Agriwise solar loans

When it comes to tailored financial support, Agriwise loans are designed with the farming and MSME ecosystem in mind. For solar loans, we offer:

Competitive interest rates
Flexible repayment terms up to 10 years
Assistance with subsidy processing, including PM-KUSUM and state schemes
Expert guidance on required approvals, vendor selection, and installation monitoring

Whether you’re a farmer seeking a solar irrigation pump loan, or an MSME looking for a rooftop solar loan, Agriwise ensures that you get the best match between financing, subsidy, and delivery. Our streamlined process saves you both time and effort—so you can concentrate on cultivating growth.

How to choose the right solar loan option?

Conclusion: Pay less, save more

A solar loan provides a powerful lever to pay less for energy and save more for your enterprise—whether you’re a farmer leveraging farmers solar loan India or a small business financing rooftop arrays through MSME solar loan programs. With the aid of solar loan MSME India, solar loan scheme India, and solar loan subsidy India, investing in solar has never been more financially prudent.

Let Agriwise guide you through agricultural solar financing and ensure you seize the full potential of solar loan for farmers India or solar financing MSME offerings. Going solar is not just an environmentally smart move—it’s a financially savvy strategy for long-term prosperity.

Disclaimer

How to get an LAP loan (Loan Against Property) for your agribusiness?

September 03, 2025

For agribusinesses seeking capital without compromising operational liquidity, a loan against property (LAP loan) offers a compelling solution. An agri LAP loan leverages your existing property—be it farmland, warehouse, or residential premises—to raise funds, typically at lower interest rates than unsecured credit. For those in the agriculture sector, LAP for farmers/agribusiness bridges the gap between capital needs and formal credit access, especially in the face of rising input/raw material costs. At Agriwise Finserv, we specialize in customized LAP loans for agribusinesses, offering higher loan amounts, longer tenures, and simplified processes tailored to the unique cycles of agriculture.

Current landscape & why an agri LAP loan makes sense?

In 2025, the average agriculture loan interest rate in India stands at approximately 8.2% per annum—a decline from around 8.7% in 2023—thanks to interest subvention schemes that lower effective rates to as little as 4% for prompt repayment. These favourable terms make securing an LAP loan especially attractive for agribusinesses looking for long-term funding.

On the micro-lending end, the cooperative government in Maharashtra has capped private moneylenders’ interest rates at 9% p.a. for secured agricultural loans, reinforcing the advantage of formal borrowing routes such as agri LAP loans. Moreover, MSME loan portfolios remained robust in FY25, with portfolios at risk (PAR) in the 31–90 day bucket at just 1.7%, highlighting the relative safety and reliability of structured, collateral-backed financing such as LAP.

Step-by-Step Guide: How to secure an LAP loan for your agribusiness

1. Assess your eligibility and property value

The first step is to evaluate whether you qualify for an LAP loan. Lenders usually consider the type of property, its current market value, and your repayment capacity. The loan amount is generally a percentage of the property’s value, often between 60–70%. Farmers and agribusinesses should begin by gathering valuation details of their property such as residential, commercial or industrial.

2. Understand the terms of the loan

Before applying, understand the basics: expected loan amount, interest rates, tenure, and repayment flexibility. Agri LAP loans typically come with longer repayment tenures (up to 15 years), making them suitable for businesses with seasonal income cycles. Knowing the terms upfront ensures you borrow wisely and avoid unnecessary strain later.

3. Prepare the required documentation

Documentation is crucial for approval. Generally required papers include proof of property ownership, identity proof, financial statements, and in some cases, details of the agribusiness operations. Preparing accurate documents in advance reduces processing delays and increases the chances of a smooth approval process.

4. Apply through a trusted channel

Once prepared, you can submit your application either offline or through digital platforms. This is where Agriwise adds value—its technology-driven platform guides farmers and agribusiness owners through the application process, ensuring eligibility checks, quick submission, and hassle-free communication with lenders. By doing so, Agriwise helps applicants save time and avoid common errors.

5. Plan the utilisation of the loan

After approval, it is important to use the loan against property strategically. Funds can be allocated toward expanding storage facilities, purchasing farm equipment, or maintaining steady cash flow during crop cycles. Agriwise also provides advisory support to help borrowers align the loan with their business goals and repayment capacity.

Advantages of choosing an agri LAP loan through Agriwise

Lower interest costs compared to unsecured or informal credit
Longer tenures, up to 15 years, mitigating EMI pressures
Higher LTV, preserving capital for other needs
Formal, regulated lending environment, reducing risk of predatory terms
Less documentation & BT with top-up loan option available

This makes an LAP loan a strategic instrument for building resilience in your agribusiness.

Conclusion

Securing an LAP loan for your agribusiness is not just about unlocking capital—it’s about choosing a sustainable, cost-effective financing structure that aligns with long-term productivity goals. With competitive rates of interest and supportive platforms like Agriwise streamlining access, now is an ideal time to explore agri LAP loans.

Let Agriwise help you navigate the journey—from eligibility and documentation to approval and strategic utilization. When structured right, a loan against property can be the growth catalyst your agribusiness needs—secure, efficient, and attuned to the pulse of Indian agriculture.

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Agri term loan vs. Short-term working capital: Make the right choice!

August 28, 2025

Choosing between an agri term loan and short-tenor working capital can decide how smoothly your season runs—and how quickly you scale. India’s agricultural finance landscape is deepening.
According to PIB, as of March 2024, there were 7.75 crore operational Kisan Credit Card (KCC) accounts with ₹9.81 lakh crore outstanding, underscoring the centrality of short-term credit for input purchases and in-season cash flow. At the same time, medium-to-long-term investment credit remains critical; in FY2025, NABARD disbursed ₹1.9 lakh crore in short-term refinance and ₹1 lakh crore in long-term refinance to support banks’ farm lending.

What is an Agri Term Loan—and when does it fit best?

An agri term loan is designed for asset creation and long-horizon payback. Think agriculture equipment financing (tractors, harvesters), pack-house or dairy unit set-ups, micro-irrigation, solar pumps, or land development. Tenors usually run 3–7 years (sometimes longer), with structured repayment aligned to your farm’s cash generation. For many borrowers, evaluating a farm loan in India, an agri term loan is ideal when:

You’re creating or upgrading productive capacity that yields benefits over multiple seasons.
Cash flows are predictable but lumpy (e.g., perennial crops or a new greenhouse).
You want interest rates and repayment schedules tailored under priority sector agriculture loan norms.

Critically, India continues to push agricultural credit: by December 31, 2024, ₹19.28 lakh crore of ground-level agri credit had already been disbursed against an annual target of ₹27.5 lakh crore—evidence that banks have liquidity and appetite for both investment and in-season credit.

Short-term working capital financing: The right tool for the season

Short-term working capital financing keeps operations moving between sowing and sale. Popular instruments include:

Kisan Credit Card and crop loan (including seasonal crop loan): revolving limits for seeds, fertilizer, diesel, labour, and plant protection.
Invoice financing and accounts receivable financing: unlock cash tied up in trade credit when buyers take 30–60 days to pay.
Warehouse receipt financing: borrow against stored produce to avoid distress sale and capture better post-harvest prices.

For many MSMEs in the agri value chain—aggregators, FPOs, food processors—an MSME agriculture loan structured as a working capital loan can smooth procurement cycles, bridge receivables, and fund short production runs. Policy continues to encourage access: the RBI’s Priority Sector Lending (PSL) Master Directions, March 24, 2025 added incentives—125% weight to incremental PSL in low-credit districts—to push banks deeper into underserved agri geographies.

Agri term loan vs. Short-term working capital: How to choose?

Use this quick lens to decide which instrument fits your immediate need:

Purpose

- Agri term loan: asset creation—tractor, combine, drip irrigation, dairy shed, primary processing.
- Short-term working capital: input purchases, wages, logistics, short cash-flow gaps.

Tenor & repayment

- Agri term loan: multi-year tenor; repayment aligned to harvest cycles and asset life.
- Short-term working capital: 6–12 months (often revolving); interest on utilized amount.

Security & pricing

- Agri term loan: often secured against the asset/land; eligible under agriculture loan India PSL norms.
- Short-term working capital: may be cash-flow backed (KCC), commodity-backed (warehouse receipt financing), or invoice-backed.

Cash-flow impact

- Agri term loan: spreads cost of expansion; improves productivity/quality over time.
- Short-term working capital: protects margins by preventing stock-outs, distress sales, or production stoppages.

Eligibility and application: getting prepared

Most lenders evaluate agriculture loan eligibility on the basis of land ownership/lease documentation (or FPO MSME credentials), cropping pattern, historical yields, credit history, and projected cash flows. Digital rails mean you can now complete a farm loan application online with e-KYC, e-sign, and document uploads. Borrowers should keep soil-health cards, Khasra/Khatauni or lease agreements, past sales invoices, and bank statements ready. For value-chain MSMEs, maintain GST returns, audited statements, and buyer contracts to strengthen accounts receivable financing or invoice financing proposals.

Note that regulatory parameters evolve: in June 2025, the RBI reduced small finance banks’ overall priority sector lending requirement from 75% to 60%, offering them more portfolio flexibility while continuing to support priority sectors, including agriculture—useful context if you bank with an SFB.

Smart combinations that often work

Many successful farms and agri-MSMEs blend both instruments:

Pair an agri term loan for a new cold room with warehouse receipt financing to hold inventory until prices improve.
Finance a harvester via an agri term loan, while running input purchases through KCC/crop loan to keep operations liquid.
Use invoice financing post-dispatch to shorten your cash cycle, while long-term expansion (additional pack-line or a solar pump) rides on a separate agri term loan.

With 7.75 crore KCCs already active and substantial refinance lines from NABARD in FY2025, borrowers have both breadth (short-term liquidity) and depth (long-term investment credit) to choose from—provided proposals are well-documented and cash-flows are realistic.

How Agriwise can help you choose?

At Agriwise, we understand that no two borrowers have the same agricultural finance needs. That’s why we offer both short-term working capital financing and long-term solutions like agri term loans—including structured options such as Loan Against Property. Our expertise lies in helping farmers, agri-MSMEs, and value-chain players evaluate their farm loan options, determine agriculture loan eligibility, and align repayment schedules with seasonal cash flows. Whether it’s an agriculture equipment financing, seasonal crop loan, invoice financing, or warehouse receipt financing to keep your operations liquid, or a customized agri term loan for asset creation, Agriwise ensures that financing works as a growth enabler. With a seamless farm loan application online process and deep knowledge of priority sector agriculture loan norms, we help you access the right credit at the right time—fueling productivity and profitability.

Conclusion

If you’re investing for multi-season productivity, an agri term loan is the right backbone. If you’re protecting margins this season, prioritize short-term working capital. Many agri enterprises need both—sequenced and sized to their cash-flow. Agriwise can help you choose the mix, get the agriculture loan eligibility right, and execute your farm loan application online—so credit fuels growth, not stress.

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Invoice discounting for MSMEs: How to unlock cash flow quickly?

August 21, 2025

According to The Economic Times, India’s Micro, Small, and Medium Enterprises (MSMEs) continue to be the backbone of the national economy, contributing roughly 30% to the country’s GDP while employing over 110 million people across diverse industries. Yet, despite this massive footprint, MSMEs continue to face their biggest hurdle: timely access to working capital.

Delayed payments remain one of the most pressing challenges. Receivable cycles for MSMEs often stretch well beyond 60–90 days, tying up critical funds in unpaid invoices. This creates liquidity bottlenecks that slow down operations, force small businesses to rely on costly informal credit, and in many cases, stall growth altogether. The problem is particularly acute in agri-linked MSMEs, where seasonal demands, procurement cycles, and buyer concentration magnify the stress.

Against this backdrop, invoice discounting has emerged as a practical and increasingly popular financing solution. By allowing MSMEs to unlock cash against unpaid invoices, it provides immediate liquidity without the need for heavy collateral. With the rise of digital lending platforms, the process has become faster, more transparent, and more accessible than ever before. For businesses struggling with delayed receivables but eager to capitalize on new opportunities, invoice discounting can be the difference between stagnation and sustainable growth.

What is invoice discounting?

Invoice discounting is a short-term borrowing option that enables MSMEs to raise funds against their outstanding invoices. Instead of waiting for a buyer to settle payments after 60 or 90 days, the business can sell the invoice to a financier and receive a majority of the invoice value upfront. Once the buyer pays the invoice, the financier deducts a small fee and releases the balance.

Unlike traditional bank loans, invoice discounting is linked directly to sales and receivables. This means the funding grows in proportion to business turnover and does not always require physical collateral. It is especially suited for MSMEs that supply to large, creditworthy buyers but struggle with elongated receivable cycles.

Why does it matter for MSMEs in 2025?

The importance of invoice discounting has only grown in recent years. Financiers have shown growing appetite as invoice-backed lending is considered lower-risk when backed by reputed anchors.

For MSMEs, this means greater access to affordable working capital, faster turnaround times, and reduced reliance on informal lenders. In a market where liquidity crunches are often the difference between capturing an opportunity and losing it, invoice discounting ensures that businesses can keep production cycles running smoothly, pay suppliers on time, and meet seasonal demands.

What are the benefits of invoice discounting?

Faster access to cash flow: Convert unpaid invoices into ready funds in days.
No heavy collateral needed: Limits are based on receivables and anchor strength rather than property or machinery.
Competitive pricing: With multiple financiers bidding on credit lending platforms, MSMEs can often secure better rates.
Improved discipline: Digital trails encourage timely approvals, clean invoicing, and healthier buyer-supplier relationships.
Scalability: As your sales and invoices grow, so does the financing capacity.

Risks and considerations

While invoice discounting offers multiple benefits, MSMEs should also evaluate:

Anchor reliability: The model depends heavily on the buyer’s ability and willingness to pay on time.
Documentation quality: Errors in e-invoicing, GST filings, or purchase orders can delay funding.
Cost-benefit analysis: Discounting carries a fee, so businesses must weigh it against the returns gained from faster inventory rotation or early-payment discounts.
Platform choice: Several financial institutions & platforms ensure transparency and regulatory oversight, while NBFCs and fintechs may offer speed and flexibility.

How Agriwise supports MSMEs?

Agriwise, as a specialised NBFC, understands the unique challenges of agri-linked MSMEs and allied sectors. Our services include invoice discounting and vendor financing, enabling businesses to access cash tied up in receivables. Beyond this, we provide Structured Trade Finance (STF) solutions through StarAgri that cover not just warehoused stock but also in-transit and imported goods. Additionally, we offer Loan Against Property (LAP) and equipment financing to meet broader credit needs. By combining deep sector expertise with data-driven assessments of anchors and cash-flow cycles, Agriwise ensures that MSMEs can unlock liquidity quickly, responsibly, and at competitive costs—empowering them to grow without over-reliance on informal credit sources.

Making invoice discounting work for you

To effectively leverage invoice discounting, MSMEs should:

Map receivables: Identify invoices linked to strong anchors with consistent payment track records.
Digitize processes: Maintain clean e-invoices, GST returns, and supporting documents.
Select the right partner: Choose NBFCs like Agriwise for transparent & tailored solutions.
Assess ROI: Compare the cost of discounting against benefits like faster raw material procurement or meeting seasonal demand.
Scale gradually: Start with select anchors, then expand financing to multiple buyers to balance.

Conclusion

LIn 2025, as MSMEs continue to drive India’s growth story, timely access to working capital remains their most critical requirement. Invoice discounting has emerged as one of the most efficient ways to address this challenge—bridging the gap between raising invoices and receiving payments. With regulatory backing, rising digital adoption, and growing financier participation, the ecosystem is more robust than ever before.

For agri-linked businesses in particular, where cycles are seasonal and liquidity is often under strain, invoice discounting can transform financial stability. Backed by experienced partners like Agriwise, MSMEs can turn receivables into growth capital—unlocking opportunities, sustaining momentum, and building resilience for the future.

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Top ways agribusinesses can use Loan Against Property to grow!

August 14, 2025

Agribusinesses require timely access to capital to expand, modernise, and stay competitive. One of the most effective ways to raise substantial funds is through a Loan Against Property (LAP). By leveraging owned agricultural, residential, or commercial property, businesses can unlock the value of their assets without selling them. With competitive loan against property interest rates and flexible repayment options, LAP loans are becoming a preferred financing solution for agri-entrepreneurs.

As per the insights, credit to the MSME sector crossed a whopping ₹40 trillion—growing 20% year-on-year—reflecting the expanding financial ecosystem for small businesses across India, as of March 2025.

1. Expanding storage and warehousing capacity

Agribusinesses often face post-harvest losses due to insufficient storage infrastructure. With a property loan, you can build or upgrade warehouses, cold storage units, and silos. Accessing funds through a LAP loan ensures you can invest in large-scale storage without disrupting your operational cash flow.
According to the Business Standard, MSME loans held up well in terms of asset quality in FY25, with the portfolio at risk (PAR) in the 31–90 days bucket at just 1.7%, and even improving in longer overdue buckets—clearly underlining the financial stability available for such structured lending options. Before applying, it’s wise to check the loan against property rate of interest and use a mortgage loan calculator India to plan your budget.

2. Investing in modern farming equipment

Mechanisation is crucial for increasing productivity. Tractors, harvesters, irrigation systems, and processing machinery require significant investment. A loan against property loan provides the capital needed for purchasing such equipment, improving efficiency and reducing labour costs.
NBFCs’ micro-LAP segment grew over 25% annually in FY25, outpacing overall MSME credit growth and reflecting strong demand for property-secured loans for business capital.

Using an EMI calculator for mortgage loan helps determine monthly repayment amounts and ensures the investment aligns with revenue cycles.

3. Funding agri-processing and value-addition units

Value-added products, such as processed grains, packaged oils, or organic produce, command better market prices. By opting for a LAP loan, you can set up or expand processing facilities, meeting growing consumer demand.
The interest rate on loan against property can vary depending on the lender, tenure, and property value. Comparing multiple lenders before you LAP loan apply can help secure favourable terms.

4. Scaling distribution and logistics

Efficient logistics can significantly reduce transportation costs and expand your market reach. Whether it’s buying refrigerated vehicles or setting up a distribution hub, LAP loans provide a cost-effective funding route.
A property against loan interest rate is generally lower compared to unsecured loans, making it a practical choice for long-term infrastructure investments.

5. Diversifying into new crops or markets

Agribusinesses can use LAP loans to diversify into high-value crops, organic farming, or export markets. A home mortgage loan calculator helps assess feasibility based on projected income.
According to Money Control, MSME exports surged from ₹3.95 lakh crore (2020-21) to ₹12.39 lakh crore (2024-25), and MSMEs accounted for roughly 45.8% of total exports—underscoring the upside potential for agri diversification using formal credit instruments like LAP.

6. Clearing high-interest debt

If you have multiple loans with higher interest rates, consolidating them under a loan against property loan can reduce your overall interest burden. This allows for better cash flow management, freeing funds for expansion projects.
Using a mortgage loan calculator India will give you clarity on the potential savings by switching to a lower loan against property interest rate.

Agriwise LAP (Loan Against Property) solutions for agribusiness growth

At Agriwise, our Secured Business Loan (LAP) empowers Agri and MSME businesses to unlock the real value of their property. With loan amounts ranging from ₹5 lakhs to ₹5 crores and flexible tenures up to 15 years, our LAP serves as a strategic financial tool for business development, working capital, and capital expansion. You can mortgage residential, commercial, or industrial properties to access competitive loan against property interest rates. Plus, our services include top-up loans on existing LAPs and balance transfer options—making it easier to refinance and reduce overall borrowing costs.

Why use LAP loans?

Lower interest rates – Structured borrowing through property collateral tends to be more cost-effective than unsecured credit.
Large loan amounts – Access between ₹5 lakh and ₹5 crore—perfect for big investments.
Flexible tenures – Up to 15 years to align repayments with seasonal cash flows.
Retain ownership – You retain use and control of the mortgaged property.

Conclusion

For agribusinesses looking to modernise, expand, or diversify, a loan against property loan offers a powerful financing lever. Equipped with a mortgage loan calculator India and EMI calculator for mortgage loan, agripreneurs can construct sustainable growth models. With India’s MSME credit ecosystem strengthening and vast unmet financial demand still existing, structured solutions like LAP loans—especially Agriwise’s tailored offering—provide a potent combination of flexibility, scale, and financial prudence to fuel your growth journey.

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