Agriculture
GuarantCo Partners with HSBC India to Support Arya.ag’s Agricultural Innovations
In a groundbreaking move to strengthen India’s agricultural sector, GuarantCo, part of the Private Infrastructure Development Group (PIDG), has extended two partial guarantees to HSBC India for an INR 2.5 billion (approximately USD 30 million) loan facility. This financial backing is earmarked for Arya.ag, India’s largest grain commerce platform, to enhance liquidity for farmers, farmer-producer organizations (FPOs), and small agricultural enterprises.
Empowering Farmers Through Financial Inclusion
The loan will provide post-harvest liquidity, enabling farmers and agri-enterprises to sidestep distress sales by storing their commodities until off-season periods when prices are more favourable. This approach often yields 20-30% higher returns, significantly improving farmers’ incomes and overall economic stability. By integrating these stakeholders into the formal banking system, Arya.ag aims to unlock greater value for their produce.
This partnership marks GuarantCo’s first foray into India’s agricultural sector, emphasizing financial inclusion and climate resilience. Indian Agriculture remains a vital component of the economy, employing nearly 60% of the workforce and contributing 20% to the GDP. Yet, over half of Indian farming households remain excluded from formal credit systems, a gap this initiative seeks to bridge.
A Step Towards Sustainability
Arya.ag has been a trailblazer in redefining the agricultural value chain by offering farmgate-level storage, instant financing against commodities, and transparent market linkages. These services ensure farmers and FPOs can make informed decisions about when and where to sell their produce, fostering a more equitable agricultural ecosystem.
GuarantCo’s involvement aligns with the United Nations Sustainable Development Goals (SDGs), specifically:
SDG 2: Zero Hunger – Doubling the productivity and income of small-scale food producers.
SDG 15: Life on Land – Promoting sustainable land use and halting biodiversity loss.
Nishant Kumar, Managing Director, Asia Investments at GuarantCo, expressed optimism about the partnership: “We are delighted to collaborate with HSBC India to support Arya.ag in revolutionizing the agricultural marketplace. Arya’s innovative model has immense potential to empower underserved farmers by expanding storage, finance, and commerce opportunities, ultimately increasing their revenues.”
Market Transformation and Social Impact
The loan facility will benefit Arya.ag’s integrated commerce platform, Aryatech, and its fintech arm, Aryadhan. These platforms leverage technology to bring transparency and efficiency to agricultural transactions. Arya.ag also enjoys support through a Technical Assistance grant from the PIDG Trust, further strengthening its capacity to innovate.
Sonali Shahpurwala, Managing Director and Head of the Inclusive Banking Unit at HSBC India highlighted the bank’s commitment to the initiative: “This collaboration with GuarantCo and Arya underscores our dedication to providing financial solutions that drive sustainable growth in India’s agriculture sector. By enhancing infrastructure and liquidity, we aim to create lasting, positive change.”
Anand Chandra, Co-Founder and COO of Arya.ag emphasized the partnership’s transformative power: “With GuarantCo and HSBC India’s support, we can expand our reach and connect farmers, FPOs, and agri-enterprises to critical resources. Our integrated model ensures secure storage, accessible financing, and transparent market linkages, reshaping the agricultural landscape into a more inclusive and efficient ecosystem.”
Driving Agricultural Growth
GuarantCo, a credit enhancement and infrastructure investment firm under the Private Infrastructure Development Group (PIDG), mobilizes private sector investments in low-income African and Asian regions. Since 2005, It has facilitated USD 6.8 billion in investments, creating jobs and improving infrastructure access for millions. This landmark transaction signifies a new chapter in India’s agricultural sector. By integrating innovative financial solutions and market infrastructure, GuarantCo, HSBC India, and Arya.ag are paving the way for a more resilient and inclusive Indian agricultural economy. With this collaboration, small-scale farmers can look forward to enhanced economic opportunities, driving sustainable growth for the sector and contributing to India’s socio-economic development.
