2019 Inclusive finance

What challenge was the inspiration for your project?

In India, smallholder farmers, representing 80% of the country’s farming community, typically have limited or no access to finance. In many cases the loans offered by traditional banks do not cater for their needs and often have long and tedious loan application procedures. Also, the agricultural sector is predominantly served by the public sector (state-owned bank) as part of governmental outreach to farmers. Due to the fear of political interference (such as loan waivers) many private sector financial institutions are hesitant to take direct exposure to agriculture.

What was your innovation that addresses this problem?

Samunnati addresses these hurdles and is solely focused on serving the needs of the agricultural sector. This is a sector in which the poorest segments of India’s rural population are dependent on for their livelihoods. We offer customised, timely and affordable finance to all players across the agricultural value chain; from the smallholder farmer, Farmer Producer Organisations (FPOs) and farmers’ collectives to agri businesses.

Samunnati is a Sanskrit word and stands for collective growth, collective prosperity, collective elevation. Our aim is to create an ecosystem for the agricultural sector, that improves the position of all players in the agricultural sector.

What impact has Triodos Bank had on your business?

Samunnati started its operations in 2014 and currently works with over 500 FPOs with a membership base of over 4 million farmers across 16 states in India. We are predominantly active in our home state Tamil Nadu. Recently, we have started to expand to north and central India and other agricultural sectors. The debt finance we have received from Triodos Microfinance Fund, Triodos Fair Share Fund and Hivos-Triodos Fund contributes to realising our growth ambitions.

What impact has your business had on the sector you work in?

We are a pioneer in agri financing with a holistic approach. Our goal is to create an ecosystem for the agricultural sector, that improves the position of all players in the agricultural sector. With the help of various partnerships, Samunnati addresses the grass-root level problems while also enabling growth for everyone in the agricultural ecosystem. We support a sector that is crucial to the livelihoods of millions of people and also explore the niche value chain for sustainable ecosystem development. We do more than providing access to finance. We also offer advisory services, for example to train farmers how to increase their yield, and how to market their produce and to encourage climate-smart agriculture standards, that promote crop harvesting during the perfect time.

What impact has your business had on the community?

We understand the needs of the smallholder farmer. As a financier, as a lender, we understand the risks associated with the farmers’ cashflows and we know how to deal with these risks. Furthermore, by aggregating smallholder farmers into Farmer Producer Organisation we give them access to local markets, processing facilities, and training programmes.

How does Triodos Bank share your vision?

Just like Samunnati, Triodos strongly believes that access to finance is vital for driving economic and social development, and personal development. And we share the same holistic approach towards financing the agricultural sector: not only focuses on the individual farmer but on all players across the agricultural value chain. This holistic approach is key in establishing a fair and inclusive ecosystem for the Indian agricultural sector.