The platform collaborates with over 25 banks and FIs to help them disburse secured loans:
Arya.ag, India’s largest integrated commerce platform, facilitates sizable finance annually to maximize value for sellers and buyers of grain. The platform eliminates distress sales of farmers’ produce by enabling farmgate storage and seamless finance options, offering farmers the freedom of when and whom to sell to. The founders of Arya – Chattanathan Devarajan, Prasanna Rao and Anand Chandra – have decades of experience in agri-business and agri-finance. Anand Chandra, Executive Director & Co-founder, explains the financing component of Arya.ag.
Mehul Dani: What is the magnitude of financing and business Arya’s digital platform has been able to facilitate?
Anand Chandra: Currently, commodities worth about Rs150 bn flow through Arya.ag and we facilitate over approximately Rs55.8 billion (as per current rate) of finance annually to maximize value for both sellers and buyers. Our embedded digital lending business on the platform has had traction of over approximately Rs3 bn in the recent 3 months. For the fiscal year gone by, Arya.ag closed with a grain AUM of approximately Rs87.6 billion bolstered by a rapid surge in commerce volume with gross transaction value (GTV) to the tune of approximately Rs21.5 billion. Second half of FY22 recorded a phenomenal 4X rise in commerce volumes over the first half on the platform with take rates strengthening by over 2X. During the year, the platform saw large adoption of its structured trade solutions by varied entities spanning across farmers, FPOs, millers and agri-corporations.
How does Arya.ag’s platform enable finance function?
Arya.ag’s unique integrated cluster-led model enables it to layer multiple services to the same customer over the year in contiguous geography. The finance layer seamlessly sanctions instant finance. And finally, the commerce layer propels commerce transactions on our platform. Each of the 8000 sellers on Arya.ag’s platform has a digital address and can connect with buyers through digital contacts. This has helped us achieve significant scale profitably to reinforce our position as a market leader in the agri ecosystem. Today, Arya.ag ensures growth of 15-25% in their value realization, by positively impacting over 0.65 million farmers across 500 FPOs.
With how many banks you have lending arrangements? What is the growth in the lending?
Our partnerships are with over 25 banks, which help facilitate finance of over approximately Rs55.8 billion annually. The embedded digital lending business on the platform hit the milestone of approximately Rs1.034 billion of loan disbursement amount in the month of March 22 alone. The platform saw a 2X rise, to close the year at approximately Rs5.177 billion in its digitally led fully secured loan disbursements. The increased uptake in its digital lending solutions was immensely influenced by the launch of insta-loan disbursement bouquet of services for farmers that simplifies and optimizes the lending process and end-user experience in gaining access to financial services. The adoption rates were in excess of 90%.
Apart from lending through its own balance sheet, the platform collaborated with over 25 banks and FIs to help them disburse approximately Rs20 billion of secured loans in the last fiscal, a growth of over 3X in the collaborated lending book. Arya also offers warehouse receipt financing via Aryadhan, its wholly owned NBFC subsidiary. Aryadhan provides credit to farmers, FPOs and SME aggregators (processors/traders) who have stored agri commodities in the Arya warehouse network.
Which are your co-financing offerings?
We have announced co-lending solutions to offer agri-finance to farmers with a specific focus on small farmers and FPOs. We are targeting to achieve a co-lending portfolio of Rs1 billion with new-age digital technologies driving this enablement.
What are the usage patterns of digital platforms for disbursals?
We have digitised our warehouses and enabled a digital identity for over 10,000 warehouses across India. During the last year, our platform saw large adoption of structured trade solutions by varied entities. 80% of FPOs transact on Arya.ag and more than 98% of all disbursements happen online. The top 3 states in terms of business are Bihar, Rajasthan, and Madhya Pradesh.
How have you gained in terms of business by the digitization?
The fact that our finance book has almost doubled in the first 2 months of the current FY, despite our rates being higher than the bank, is a testimony to the digitization and convenience we have added to the lives of the customers.
