• Entire Agri Value Chain Needs Credit Support

    Agri Value Chain
    Agriculture remains a vital means of alleviating poverty, but a shortage of money may hinder its development. Simultaneously, agriculture is developing into a global system that demands competitive, high-quality products and is structured along value chains that frequently leave out smallholders.

    Agriculture value chain or agri value chain financing presents a chance to expand the reach, lower the cost, and lower the risk of financing agriculture. Additionally, providing resources for smallholders to be integrated into higher-value market prospects, can contribute to the inclusiveness of value chains.

    This article explores the importance of credit support across the agricultural value chain to support innovation and enhance the importance of each link throughout the supply chain, encouraging growth with environmental sustainability.

    What Is an Agri Value Chain?

    A value chain involves both humans and equipment involved in agricultural activities and spans the whole spectrum of operations from inception to distribution.

    Hence, developing seeds, planting, managing pests, farming output, harvesting and handling, shipping, warehousing, packaging, finance, promotion, and consumer input would all be included in an agri value chain in order to bring products from the farm to the table.

    However, a number of issues, such as restricted finance availability, frequently impede the efficient operation of these chains. Finance is required at the,

    1. Pre-Production Stage

    Investment in inputs: High-quality seeds, fertilizers, and modern equipment are important to achieving high crop yields.

    Credit Facilities: Accessibility to such facilities by smallholding farmers will enable them to improve their farming practices and purchase essential inputs.

    Encouraging Innovation: Financial support to take up an initiative towards developing sustainable practices and farming styles of the modern era.

    2. Stage of Production

    Operational Costs: This is the money required for the labor force, irrigation, and other necessary resources.

    Risk mitigation: Credit support is needed to reduce risks like pest infestations and drought caused by irregular weather.

    Sustainability in production: Despite the obstacles, financial resources are needed to encourage the continuation of agricultural production.

    3. Stage of Distribution & Processing

    Investment in Infrastructure: The renovation of process facilities will entail investment for both technology adoption and improvement.

    Inventory control: Credit support makes it possible to optimize the supply chain by reducing agricultural product wastage through management efficiencies.

    Agtech B2B Firms

    The application of digital technology to the agricultural supply chain is referred to as Agricultural Technology (Agtech). An agtеch businеss to business (Agtech B2B) firm uses cutting-edge technology to solve problems and streamline operations within the agricultural industry.

    Such firms have a wide range of products and services catered to the particular requirements of agricultural enterprises, from precision agricultural instruments to farm management software. Their influence extends to several phases of the agricultural value chain and includes:

    Prе Production Phasе: Farmers can use data-driven insights provided by Agtеch B2B solutions to optimize inputs, increase production, and reduce risks.

    Production Phase: The precision farming technology used in cultivation enhances resource management and crop health monitoring through systems in this phase.

    Procеssing and Distribution: Harvesting and Agtеch B2B technology enable the improvement of traceability, reduction of wastage, and optimization of processes to increase supply chain efficiency.

    Agtеch B2B firm solutions have the potential to be revolutionary, but financial obstacles prevent them from being widely adopted.

    Ineffective rural credit: Despite the country’s rural credit structure’s expansion, the amount of rural credit available still falls short of what is needed, given the country’s expanding agricultural cost of inputs.

    Insufficient institutional coverage: Considering India’s expanding needs and in spite of institutional credit arrangements, India is still inadequate. The growth of cooperative credit institutions such as primary agricultural credit societies, commercial banks, land development banks, and regional rural banks has failed to cover the entire rural farm sector of the country.

    Less attentiveness to poor farmers: Rural credit agencies and their schemes have failed in their endeavor to meet the needs of small and marginal farmers. Consequently, credit agencies have paid less attention to the credit demands of the poor farm sector. In comparison, they paid more attention to the relatively well-off farm sector due to the fact that it is highly creditworthy.

    Inadequate loan sanction: The amount of loans that the agencies have sanctioned for farmers is also quite insufficient to meet all their various agricultural operations. Considering the fact that the loan amount sanctioned was inadequate and insignificant, the farmers usually divided such loans for unproductive purposes and thus diluted the very purpose of such loans.

    Diversifying Credit Portfolios

    Credit portfolio diversification is vital for reducing risks linked to agricultural financing. The uniqueness of requirements and dynamics of agricultural value chains is frequently ignored by traditional lending processes and results in insufficient financial solutions and increased vulnerability.

    Credit institutions can further promote inclusivity and resilience by providing tailor-made goods and services in line with the specific needs of various stakeholders in the agricultural value chain through the diversification of lending portfolios.

    Financial institutions can further enhance the efficiency of loan support for agricultural stakeholders by incorporating Agtech B2B firm solutions into agrarian financing mechanisms. This would enable stakeholders to adopt sustainable practices, optimize production processes, and further expand into new market frontiers.

    Agri value chains are realized through the integration of Agtech solutions and effective financial support. Smallholder farmer’s productivity can be enhanced, livelihoods, and reduced poverty through the provision of technology, training, and loans. Besides, diversified loan portfolios help maintain stability and resilience in financial institutions by lowering the systemic risks related to agricultural lending.

    Agtech has the potential to significantly increase customer efficiency in a variety of ways, from the use of sensors for crops and livestock to optimize farm management to the development of marketplaces that link producers and distributors.

    Some might argue that banks, as significant capital and investment sources, are intrinsically related to the agricultural sector’s change. Although there isn’t agreement within the financial services sector regarding potential contribution, there is a market for Agtech to be used in the development of more intelligent supply chains, customized credit products, and improved insights.


    Global food systems and economies are heavily reliant on agricultural value chains, but to reach their full potential and to deliver measurably to address the funding issues and encourage innovation are required. As a facilitator key and credit support to each participant involved in the agri value chain, they provide the tools they need for success.

    Diversifying loan portfolios and using agtech B2B enterprise know-how can help improve productivity, sustainability, and resilience within agricultural value chains, opening the door to a more affluent and food-secure future.

    Finverv’s software as a service (SaaS) platform links businesses with a variety of lending institutions to close the funding gap in agriculture. Finverv provides adaptable credit solutions, reduces risk, expedites credit approval, and incorporates cutting-edge technology for effectiveness.