Tag Archives: agri finance

What are the future trends in Indian agribusiness & MSME finance?

June 11, 2025

As India marches toward becoming a $5 trillion economy, MSME finance and agribusiness continue to drive inclusive and sustainable growth. With nearly 63 million micro, small and medium enterprises (MSMEs) contributing around 30% to India’s GDP, and agriculture employing over 50% of the workforce, both sectors demand innovative, tech-led financial solutions.

Agricultural credit in India is projected to exceed ₹31.5 lakh crore in FY26, driven by increased formalisation of rural credit—signalling a shift toward more structured, data-backed, and accessible financial systems.
Let’s explore the key agribusiness trends and the evolving landscape of MSME credit solutions shaping India’s economic future.

1. Rise of Digital Lending Platforms

One of the most defining developments in MSME finance is the rapid growth of digital lending. Startups and NBFCs are using alternative credit scoring methods—such as transaction data, utility payments, and GST returns—to extend loans to borrowers who were traditionally excluded from the formal financial system.
This evolution is crucial as millions of businesses lack formal credit histories. Fintech for MSMEs has emerged as a lifeline, especially post-pandemic, offering fast, collateral-free access to capital—reducing dependency on unorganised lenders and improving financial inclusion across rural India.

2. Co-Lending Models: Banks + NBFCs = Wider Reach

To bridge the significant credit gap, co-lending partnerships between banks and NBFCs have gained momentum. Banks offer a lower cost of capital, while NBFCs provide last-mile reach. This hybrid approach is enabling faster and more effective disbursement of MSME loans in 2025, particularly to underserved areas.
In fact, NBFCs have become key contributors to MSME finance in India, outperforming banks in disbursement volumes in the last fiscal year. This collaboration also fosters tailored credit offerings, better suited to the real-time needs of small businesses and agri-entrepreneurs.

3. Government-Led MSME Finance Solutions

The government’s focus on MSMEs has intensified through schemes such as the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises). As of late 2024, CGTMSE had facilitated over ₹5.2 lakh crore in guarantees. The recent budget also announced the introduction of MSME credit cards, offering working capital limits of up to ₹10 lakh under automatic guarantee coverage.
These initiatives are expected to enhance the accessibility of MSME loans in 2025, especially for first-generation entrepreneurs, women-led enterprises, and rural agri-based MSMEs—boosting job creation and economic resilience.

4. Green Finance: A Sustainable Future for Agribusiness

As sustainability gains priority across industries, MSME finance is also adapting. Financial institutions are offering incentives for eco-friendly initiatives—such as solar-powered agri equipment, organic farming, and energy-efficient food processing units.
This alignment with ESG (Environmental, Social, and Governance) goals is a key future trend in agri finance, helping agribusinesses reduce carbon footprints and qualify for better financing terms. Dedicated schemes, such as RAMP and green funds, are expected to drive this transition forward in 2025 and beyond.

5. Embedded Finance and Supply Chain Digitisation

With more MSMEs and agri-enterprises going digital, embedded finance—offering financial services directly within non-financial platforms—is transforming the way loans and payments are accessed. Businesses using marketplaces, ERP systems, or mobile apps can now access MSME credit solutions without leaving their digital ecosystems.
Simultaneously, digital supply chain finance is growing, supporting vendors, distributors, and processors with faster payments, credit lines, and invoice discounting. This is a critical development for agribusinesses relying on seasonal liquidity and fluctuating input costs.

6. AI-Powered Lending & Risk Assessment

The integration of AI and analytics in credit evaluation is redefining MSME finance. By utilising satellite imagery, crop monitoring data, and transaction analytics, lenders can more accurately assess risks and process loans more efficiently. This is particularly impactful in agri-finance, where traditional underwriting methods often fall short.
This data-driven approach ensures that borrowers with viable but informal operations are not left out. It also boosts credit discipline and helps institutions maintain portfolio health while serving new-to-credit segments.

7. Supportive RBI Policies & Rate Cuts

In June 2025, the Reserve Bank of India reduced the repo rate and cash reserve ratio, aiming to boost liquidity in the banking system. These changes are expected to make MSME loans in 2025 more affordable and accessible.
With MSMEs accounting for just 16% of formal credit but over a quarter of GDP, such measures are essential to balance risk and support expansion, especially in agri-linked businesses that face seasonal cash flow cycles.

The Road to MSME Finance: Empowering India’s Growth Engines

The future of MSME finance in India is poised for greater inclusion, efficiency, and resilience. Here’s a snapshot of the key agribusiness trends and financing shifts:

Digital lending to expand credit access and formalise small businesses
Co-lending models for deeper credit penetration in underserved markets
Green and ESG-aligned loans to support sustainable agribusiness growth
Embedded finance and supply chain tools for seamless MSME funding
AI-powered crop and enterprise finance for smarter credit risk evaluation
Policy push and credit guarantee schemes for risk mitigation and affordability

With evolving borrower needs and a supportive policy environment, these trends will drive the next wave of growth in both agribusiness and MSMEs.

Agriwise: Enabling the Future of Agri and MSME Finance

At Agriwise, we are proud to be part of India’s evolving MSME finance journey. Our offerings are designed to empower farmers, traders, and agri-based businesses with timely, transparent, and tech-driven credit access.

Through our warehouse receipt financing, we help farmers turn stored produce into instant working capital, eliminating distress sales and enabling smarter price realisation.
We combine field-level insights with data analytics and fintech tools to offer tailored credit assessments—redefining MSME credit solutions for the agri sector.
Our growing network of bank partnerships and co-lending arrangements makes MSME loans in 2025 more accessible and flexible.
Agriwise is also committed to sustainability, financial literacy, and empowering women and first-generation agri-entrepreneurs with responsible access to credit.

As the future of agri finance becomes smarter and more inclusive, Agriwise remains committed to enabling India’s farmers and MSMEs with the financial tools they need to succeed.

How to Apply for a Warehouse Receipt Loan at Agriwise: A Step-by-Step Guide

June 05, 2025

A warehouse receipt loan can be a lifeline for farmers, traders, and processors who need liquidity without having to sell their produce at suboptimal prices. Agriwise Finserv, a trusted name in agri-focused lending, offers this facility as part of its commodity finance portfolio, providing short-term working capital against the value of agricultural stock stored in approved warehouses.

India’s agricultural credit target has been set at ₹20 lakh crore for FY 2024–25, and the emphasis on inclusive rural finance is growing; understanding how to apply for a loan against warehouse receipt is more relevant than ever.
But how to apply for one? Here’s a step-by-step guide to navigating the process of applying for a warehouse receipt loan at Agriwise.

Step 1: Customer Walk-in or Lead Generation

The journey begins with the customer—whether a farmer, commodity trader, or processor—approaching Agriwise through its branch office, field location, or sales team. During this initial interaction, the Agriwise team shares key details about the agri loan product, including loan tenure, interest rates, eligibility, and repayment options. This conversation helps establish clarity and sets expectations, ensuring the applicant is well-informed before moving forward.

Step 2: Lead Creation in Loan Origination System (LOS)

Once the customer agrees to proceed, their details are digitally entered into Agriwise’s Loan Origination System (LOS). This step includes capturing:

KYC documents
Financial and business background
Details of the agricultural commodities to be pledged

Using LOS ensures a systematic and efficient onboarding process, reducing delays and paperwork.

Step 3: Credit Appraisal

Agriwise then conducts a thorough credit appraisal. A credit bureau check is performed to assess the borrower’s credit history, followed by an internal evaluation against Agriwise’s credit policy. Parameters like repayment behaviour, past borrowing records, and current eligibility are taken into account.

This step ensures that credit is extended responsibly, ensuring the security of both the borrower’s and lender’s interests.

Step 4: Case Sanction and Documentation

Once the application passes the credit check, the case is sanctioned. The borrower is then required to complete the documentation process, which includes signing the loan agreement and other pledge-related papers. Agriwise ensures that all documentation is transparent, giving the borrower complete visibility into the terms and conditions.

Step 5: Commodity Pledge and Warehouse Receipt Generation

The borrower deposits the agricultural commodities at an Agriwise-approved warehouse. A designated Collateral Manager (CM) checks the quality and quantity of the stock. Once satisfied, the CM issues a warehouse receipt in favour of Agriwise and forwards it to the credit operations team.

This warehouse receipt is the basis for the loan and reflects the value of the pledged commodity, making it the cornerstone of the loan against warehouse receipt process.

Step 6: Disbursement of Funds

Agriwise disburses funds to the borrower based on the value of the warehouse receipt. Generally, loans are offered up to 75% of the WR value, which is known as the Loan-to-Value (LTV) ratio.

This quick access to funds allows borrowers to manage their short-term working capital needs efficiently, be it to finance the next crop cycle, pay labour, or meet operational expenses—without the pressure to sell produce immediately.

Step 7: Repayment and Collection

Repayment terms are flexible:

For farmers: Both interest and principal are repaid at the end of the loan term.
For traders and processors: Interest is payable monthly, and the principal is repaid at maturity.

Importantly, Agriwise does not levy foreclosure or part release charges. This flexibility gives borrowers the freedom to repay as per their cash flow, especially in times of market volatility.

Why Warehouse Receipt Loans Matter?

With only about 30% of India’s small and marginal farmers having access to formal credit, innovative solutions like warehouse receipt loans are crucial. They allow borrowers to realise better value for their produce by avoiding distress sales, while also ensuring that the agricultural supply chain continues to function smoothly.

These loans are particularly powerful because they are asset-backed, low-risk for the lender, and timely for the borrower—fitting perfectly into the broader ecosystem of commodity finance.

Conclusion

Agriwise’s approach to warehouse receipt loans combines the assurance of physical collateral with a fast, transparent lending process. Whether you’re a farmer waiting for better prices or a trader looking for liquidity, a loan against warehouse receipt can offer the breathing space you need—without compromising the value of your produce.

By turning stored crops into working capital, Agriwise continues to play a key role in strengthening India’s rural economy, one loan at a time.

Powering Agribusiness Growth Through Smart Financial Planning

May 28, 2025

Agribusinesses in India are shifting from traditional methods to structured, commercial models. However, this evolution comes with financial challenges that demand proactive and strategic planning. Agri finance plays a pivotal role in this transformation—enabling farmers, FPOs, and agri-entrepreneurs to navigate volatility, bridge credit gaps, and unlock long-term growth.

Credit to the agriculture sector by commercial banks and regional rural banks is likely to cross Rs 31.5 lakh crore, a new record, in FY26 due to an increased formalisation of the rural credit structure, a senior official with NABARD said. In FY25, commercial banks, cooperatives and regional rural banks had disbursed over Rs 28.98 lakh crore, out of which around 60% was towards short-term crop loans and the rest was towards investment loans in agriculture and allied sectors.

Why Agri Finance Planning Is Crucial in Agribusiness?

Despite agriculture contributing over 18% to India’s GDP, the sector faces a formal credit shortfall due to several reasons. This credit gap often forces agribusinesses to rely on informal sources, making them vulnerable to debt cycles and missed growth opportunities.

How can financial planning and agri finance make a difference?

Efficient Capital Allocation: From seeds and fertilisers to irrigation and machinery, managing input costs requires precise budgeting. Strategic finance ensures that resources are allocated wisely without overextending financial leverage.

Seasonal Cash Flow Management: While agri revenues are seasonal, expenses are continuous. Tools like working capital loans, invoice discounting, and warehouse receipt finance help maintain liquidity throughout the crop cycle.

Risk Mitigation: Agri businesses face climate risks, pest infestations, and price shocks. Financial planning enables the implementation of contingencies, insurance coverage, and inventory holding strategies to mitigate such uncertainties.
Enabling Scale and Modernization: With proper financial insights, agribusinesses can confidently invest in solar energy, food processing, or logistics infrastructure—paving the way for increased productivity and sustainability.

Agriwise: The New-Age Agri Finance Partner

Agriwise is an agri-fintech NBFC offering a comprehensive suite of financial products tailored specifically for the agricultural and allied sectors. Here’s how they’re reshaping agri finance in India:

1. Secured Business Loan (Loan Against Property – LAP): Ideal for agri-MSMEs, this loan product allows entrepreneurs to unlock the value of their property for business development and expansion.

Loan amount: INR 5 lakhs to 5 crores
Tenure: Up to 15 years
Collateral: Residential, commercial, or industrial property
Benefits: Balance transfer, top-up facility, and attractive interest rates

2. Warehouse Receipt Finance: This short-term working capital loan enables farmers, traders, and processors to access credit against stored agri produce in professional warehouses.

Loan amount: Up to INR 10 crores
LTV: Up to 75% of commodity value
Network: Extensive pan-India warehouse coverage

3. Invoice Bill Discounting (Supply Chain Finance): Convert receivables into instant cash flow with this invoice financing solution, critical for smooth supply chain operations.

Loan amount: Up to INR 10 crores
LTV: 100% of invoice value
Credit tenure: 90 days
Target segments: Agri & Allied, FMCG, Pharma

4. Farmer Financing: Designed for individual farmers and Farmer Producer Organisations (FPOs), this product provides funding for critical inputs such as seeds, fertilisers, and pesticides.

Custom loan amounts based on crop type
Fast disbursal for timely input procurement
Support for sustainable farming initiatives

5. Solar Financing: Agriwise supports green transformation with loans for solar energy systems—ideal for farms, agri units, and MSMEs.

Without collateral: Up to INR 7.5 lakhs for 60 months
With collateral: Up to INR 25 lakhs for 84 months
Mounting types: Roof, ground, or shed-mounted systems

Conclusion

Smart financial planning is a necessity for success in modern agribusiness. As India’s agriculture moves toward becoming a high-growth, tech-enabled sector, financial planning will define who thrives and who merely survives. It’s not just about access to credit—it’s about strategic use of that credit, guided by risk awareness and future vision.

Agriwise exemplifies the future of agri-financing. By offering specialised products that cater to the entire value chain—from small farmers to large-scale processors—it empowers agribusinesses to plan better, invest smarter, and grow sustainably.

What Every Farmer Should Know About Crop Insurance in India

May 21, 2025

India’s agriculture sector, a backbone of the country’s economy with almost 18% GDP contribution, remains highly vulnerable to climate risks such as droughts, floods, unseasonal rainfall, and pest infestations. To safeguard livelihoods, crop insurance in India plays a critical role in minimising financial risks and helping farmers recover from crop loss.

India’s crop insurance market is projected to witness a CAGR of 7.62% during the forecast period FY2025-FY2032, growing from USD 4.56 billion in FY2024 to USD 8.21 billion in FY2032.

What is Crop Insurance?

Crop insurance is a financial safety net that compensates farmers for crop losses due to unforeseen events like natural disasters, pests, or diseases. It reduces income uncertainty, stabilises farm income, and encourages investments in better farming practices. Understanding how crop insurance works is key to long-term sustainability for any farmer. There are multiple agriculture insurance schemes in India, both government-sponsored and private:

Government-backed schemes are widely accessible and subsidised. The Pradhan Mantri Fasal Bima Yojana (PMFBY) remains the flagship initiative, offering coverage from pre-sowing to post-harvest stages.
Weather-Based Crop Insurance Scheme (WBCIS) insures against adverse weather patterns like temperature or rainfall deviations.
Licensed insurers offer private crop insurance for high-value or non-notified crops.

Each scheme offers different levels of protection, and farmers should evaluate which suits their crop, region, and risk exposure best to identify the best crop insurance scheme. To benefit from these schemes, farmers must meet certain crop insurance eligibility criteria:

They should be land-owning cultivators, sharecroppers, or tenant farmers.
Registration must be completed within the stipulated enrollment period.
Aadhaar-linked bank accounts and relevant land records are required for claim disbursement.

How to Apply for Crop Insurance?

Farmers can learn how to apply for crop insurance through multiple channels:

Government platforms like the PMFBY portal
Common Service Centres (CSCs)
Local agriculture offices and banks
Mobile apps and direct insurer tie-ups

Timely enrollment is critical, especially during the sowing window.

PMFBY Scheme 2025: What’s New?

As of the PMFBY scheme 2025, improvements have been introduced to increase efficiency:

Use of remote sensing, drones, and mobile apps for faster claim assessment.
Voluntary participation with greater customisation.
Direct transfer of claims to farmer accounts.
These upgrades aim to enhance the PMFBY application process and reduce delays, making it a model crop insurance for farmers.

What are the benefits of this scheme?

Affordable premium rates (as low as 1.5% to 5%)
Comprehensive coverage for a wide range of crops
Transparent and technology-enabled claim processing
This scheme continues to be a lifeline for millions of farmers nationwide.

How is Agriwise enhancing farmer resilience?

Beyond insurance, farmers often need flexible financing to manage inputs, harvest costs, or expansion. Agriwise supports this journey with a range of credit solutions tailored to the agricultural ecosystem:

Farmer Financing: Offers working capital and input loans to purchase seeds, fertilisers, and pesticides.
Warehouse Receipt Finance: Enables farmers to secure short-term loans by pledging stored produce.
Secured Business Loans (LAP): Loans from ₹5 lakhs to ₹5 crores for agribusiness growth against residential or commercial property.
Invoice Bill Discounting: Converts invoices into immediate cash flow, ideal for agri supply chains.
Solar Financing: Affordable credit for adopting solar energy in farms or agro-units.

Agriwise combines tradition with fintech innovation to make agri-credit simpler, faster, and more inclusive—supporting farmers beyond just insurance.

Conclusion

Navigating agricultural risks is a part of every farmer’s journey, making crop insurance in India a vital tool for financial protection. While schemes like PMFBY help mitigate losses due to natural calamities, sustainable farming also depends on timely credit and access to financial planning.

This is where institutions like Agriwise play a crucial role. By offering need-based financing tailored to the agricultural sector, Agriwise empowers farmers to make confident decisions—from sowing to selling. With a strong focus on technology, transparency, and deep agricultural understanding, it supports farmers beyond just credit—promoting growth, stability, and resilience.

As farming continues to evolve in 2025, it’s essential for farmers to stay informed not only about crop insurance eligibility in India and the PMFBY application process, but also about financial tools that can complement insurance. Together, these resources enable farmers to manage risk effectively and invest in a more secure future.