Technology is playing a pivotal role in transforming various sectors, and agriculture is no different. Thanks to agritech startups that are equipping farmers with cutting-edge tech tools and enabling them to function more seamlessly than ever.
From crop health monitoring, crop yield estimation, crop loss assessment to various other farm activities, technology is taking over most of the routine manual field tasks. It is also empowering farmers by putting data in their hands to make informed decisions and eventually boost their income levels.
In fact, agritech firms are also leveraging technology to improve farmers’ lives from the financial front. And this doesn’t only mean giving them access to funds but various other key financial aspects in farming that can make or break their business. In this context, let’s look at how agritech is making agriculture financing seamless for farmers:
The role of robust scoring systems
Agritech companies offer scientifically designed scoring systems, a banking software to help financial institutions keep track of all the financial matters associated with a particular farm and farmer, thereby allowing them to make smart and decisive investments.
By using this tool, they can keep track of the money borrowed, spent and returned by a particular individual. It also enables them to calculate the likelihood of borrowers paying the money back on time. With these inputs in hand, institutions can make sound decisions for loan disbursement.
How does it help investors?
From an investor’s point of view, the software helps stakeholders keep track of crop health and numerous other factors of the farms they have invested in. In fact, there is a dashboard through which they can access all the essential farm data, do thorough analysis and accordingly predict returns.
How is technology a win-win for banks and agritech players?
Given the evolution in agriculture financing, more and more banks and NBFCs are collaborating with agritech firms to serve farmers better, thus breaking the conventional lending framework they followed for ages. Moreover, these partnerships also help agritech players and banks to benefit from each other.
While banks get to innovate their traditional product portfolio by leveraging agritech offerings, agritech players get to expand their customer base by serving the existing customers of banks who have been associated with them for a long time. As a result, it’s a win-win for both parties, allowing them to unlock new growth opportunities.
Enhancing insurance processes
Agritech players are also improving farmers’ life by innovating farm insurance procedures. They have made insurance buying simple, affordable and highly accessible for farmers, and most importantly, ensuring faster claim settlements. They assist insurance companies in making claim settlement seamless by helping them tailor-make services by considering various parameters.
With automation tools powered by AI and other advancements, agritech companies are adding transparency to the entire mechanism, thus keeping all stakeholders on the same page. Imagine a farmer opting for a claim and instantly getting the money credited into the account. That’s the kind of innovation agritech players are bringing to the table.
Agritech is poised to revolutionize Indian agriculture by deploying innovative solutions for farmers and other key stakeholders across the value chain. So, there is no doubt why this sector holds the potential to reach US$24 billion by 2025, as estimated by an Ernst & Young study.
As technologies evolve, we will likely witness more new solutions to real-world agriculture problems. However, for this to happen, agritech players, banks, insurance companies and the government will need to work closely and expand the scope for more innovation in this space.
Author: Akhilesh Jain, Co-Founder, Agrotech India