South Indian Bank and Arya.ag join hands to deliver Rs 250 crore in agri credit

New Delhi: Arya.ag, India’s largest and only profitable integrated grain commerce platform, has announced a strategic partnership with South Indian Bank under a Business Correspondent model to extend formal credit access to smallholder farmers and Farmer Producer Organisations (FPOs) and Agri Enterprises through warehouse receipt financing.

This collaboration aims to significantly address the financing gap in post-harvest agriculture by enabling low-cost, collateral-backed loans across remote agricultural districts.

According to industry estimates, over 60% of India’s smallholder farmers lack access to formal credit, with post-harvest finance being particularly scarce. While the demand for such credit exceeds ₹1.4 lakh crore, banks typically serve only a fraction of this need, often bypassing small and marginal producers. Agri traders in rural markets also face constraints in accessing structured finance to manage their working capital requirements across crop cycles.

“Across India’s agri ecosystem, both smallholder farmers and local agri traders often face a systemic credit gap due to lack of formal collateral and visibility. At Arya.ag, we have reimagined post-harvest finance by anchoring it in the stored commodity itself. Through our platform, every grain becomes a digital asset that can be stored, financed, or sold transparently,” said Anand Chandra, Co-founder and Executive Director, Arya.ag. “South Indian Bank’s strong institutional commitment and expansive reach make them a natural partner as we work to bring responsible, risk-mitigated credit closer to India’s remote agricultural districts. Together, we aim to solve a real and persistent challenge in rural finance and aim to facilitate partnerships worth over ₹250 crores.” he added.

With a growing footprint of over 11,000 digitised warehouses across 425 districts, Arya.ag’s tech-led platform offers end-to-end post-harvest services including aggregation, storage, embedded finance, and market linkage. The alliance with South Indian Bank will allow farmers to store their produce securely and avail immediate credit, giving them the flexibility to sell at the right time rather than under pressure immediately after harvest.

Senthil Kumar, SGM & Head – Credit, South Indian Bank, explained the bank’s role in the initiative, “The partnership with Arya.ag allows us to deliver much-needed credit to India’s agricultural communities. Farmers can now leverage Arya.ag’s data-rich and digitized warehousing solutions to store their produce and sell it at an opportune time to maximize their earnings. It opens the doors for India’s farmers to achieve more profitability with their produce. It also offers us an opportunity to introduce formal credit to India’ s smallholder farmers. We are confident that with such initiatives, we can bring more Indians, especially the hitherto underserved population, into the realm of organized finance.”

Arya.ag’s warehouse receipt financing model shifts the risk from the borrower’s creditworthiness to the quality and value of the stored commodity. This enables farmers, FPOs, and agri traders to access credit without traditional collateral or cumbersome paperwork. The partnership is particularly significant in areas where conventional banking access is limited or non-existent.

Over the last financial year, Arya.ag facilitated over USD 1.54 billion in credit through co-lending and correspondent partnerships, reporting zero NPAs. As of FY25, Arya.ag has reached 800,000 farmers and over 1,600 FPOs, many of whom operate in regions facing both climate vulnerability and financial exclusion.

The partnership also aligns with national priorities such as the Government of India’s push for agri-infrastructure development, inclusive banking, and promotion of climate-resilient agriculture in vulnerable districts.