Samunnati enters into largest co-lending partnership with SBI for financing FPOs

Samunnati, India’s open agri network, has entered into the largest co-lending partnership in India aimed at the Farmer Producer Organization (FPO) space with the State Bank of India (SBI), India’s largest bank. The initial programme amount is Rs 100 crore.

This partnership will enable Samunnati to scale its outreach to FPOs with customized financial solutions at affordable interest rates, leveraging the vast resources available with SBI. It will enhance the outreach for SBI channel credit to the under-served segment of small-holder farmers in the agriculture sector, by leveraging Samunnati’s outreach and nuanced understanding of the FPO sector.

SBI and Samunnati have also entered into a non-financial MoU to develop the FPO Sector, mainstream FPO as an asset class and increase awareness of this class of farmer-owned institutions in the banking sector.

Samunnati works with a growing network of 3000+ farmer collectives with a member base of over 6mn farmers with solutions spanning agri finance, agri commerce, and advisory services.

Anil Kumar SG, Founder & CEO of Samunnati, said, “We are delighted to partner with SBI, the largest and most trustworthy brand in Indian banking. SBI’s pan-India presence and deep interest in (the) financial inclusion of the small-holder farmers are enablers for helping an FPO avail an array of financial services. Our collective ambition is to make markets work for smallholder farmers by making available adequate, affordable and timely credit to the FPOs.”

In November 2020, the Reserve Bank of India (RBI) issued guidelines on the co-lending model between Scheduled Commercial Banks and NBFCs. SBI is one of the first banks to participate in a co-lending program aimed at mainstreaming FPOs as an asset class.

India’s farmer population struggles with access to capital, technical know-how and production efficiency. As a specialized agri value chain enabler, Samunnati strives to bridge these gaps by working with players across the value chain, thereby enabling them to function at a higher equilibrium through timely and customized solutions.

Sree Rama Charyulu M, GM, NBFC Alliances, SBI, said, “We see an immense possibility in this partnership for impacting the agri ecosystem. The focus of Samunnati in creating an impact in FPO space is of extreme relevance and we believe there is (a) significant rural business opportunity hidden within such farmer collectives. SBI would like to create a strong foothold in this space by leveraging on partnership tie-ups for customer reach while extending (the) superior finance product designing capabilities of SBI to our partners. This will create synergies at (the) operational level.”