South Indian Bank and Arya.ag join hands to deliver Rs 250 crore in agri credit

Arya.ag, a homegrown integrated grain commerce platform, has entered into a strategic partnership with South Indian Bank under a Business Correspondent model to extend formal credit access to smallholder farmers, Farmer Producer Organisations (FPOs), and agri enterprises through warehouse receipt financing.

The collaboration aims to bridge India’s persistent post-harvest credit gap by enabling low-cost, collateral-backed loans in remote agricultural regions.

According to industry estimates, more than 60% of India’s smallholder farmers remain excluded from formal lending channels, with post-harvest financing among the most underserved areas. While the credit demand in this segment exceeds Rs 1.4 lakh crore, banks cater to only a small portion of it, leaving many farmers and rural agri traders struggling to access structured finance for working capital needs.

“Across India’s agri ecosystem, both smallholder farmers and local agri traders often face a systemic credit gap due to lack of formal collateral and visibility. At Arya.ag, we have reimagined post-harvest finance by anchoring it in the stored commodity itself. Through our platform, every grain becomes a digital asset that can be stored, financed, or sold transparently,” said Anand Chandra, Co-founder and Executive Director, Arya.ag.

“South Indian Bank’s strong institutional commitment and expansive reach make them a natural partner as we work to bring responsible, risk-mitigated credit closer to India’s remote agricultural districts. Together, we aim to solve a real and persistent challenge in rural finance and aim to facilitate partnerships worth over Rs 250 crores.” he added.

Arya.ag operates more than 11,000 digitized warehouses across 425 districts and provides end-to-end post-harvest services, including aggregation, storage, embedded finance, and market linkage. The partnership with South Indian Bank will allow farmers to securely store their produce and access immediate financing, giving them the flexibility to sell at the most favorable time instead of under distress right after harvest.

Senthil Kumar, SGM & Head, Credit, South Indian Bank, explained the bank’s role in the initiative, “The partnership with Arya.ag allows us to deliver much-needed credit to India’s agricultural communities. Farmers can now leverage Arya.ag’s data-rich and digitized warehousing solutions to store their produce and sell it at an opportune time to maximize their earnings. It opens the doors for India’s farmers to achieve more profitability with their produce. It also offers us an opportunity to introduce formal credit to India’s smallholder farmers.”

Arya.ag’s warehouse receipt financing model shifts the risk from the borrower’s creditworthiness to the quality and value of the stored commodity. This enables farmers, FPOs, and agri traders to access credit without traditional collateral or cumbersome paperwork.

In the previous financial year, Arya.ag facilitated over $1.54 billion in credit through co-lending and correspondent partnerships, maintaining zero non-performing assets (NPAs). As of FY25, the company has reached more than 800,000 farmers and 1,600 FPOs, many operating in regions marked by climate vulnerability and financial exclusion.