A digital financial inclusion platform for farmers called ‘Kisan’s Advancement through Cashless Innovation’ (KANCHI) has been launched by Centre for Digital Financial Inclusion (CDFI) in association with NAF (National Agro Foundation). A cost-effective digital solution, KANCHI helps maximise cashless transactions in agriculture and facilitates small and marginal farmers in securing credit from formal financial institutions by building their financial history. It digitises the operations of FPOs (farmer producer organisations) and digitally captures business/financial transactions of the farming community, in line with the government’s push to establish FPOs (currently tax-exempted) with equal ownership and shareholding by member farmers.

The idea behind FPOs is that farmers can form groups and register themselves under the Indian Companies Act. To facilitate this, the Small Farmers’ Agribusiness Consortium (SFAC) was mandated by Department of Agriculture and Cooperation, Ministry of Agriculture, to support state governments in the formation of FPOs to improve farmers’ competitiveness and increase their advantage in emerging market opportunities.

KANCHI is currently being used by 13 FPOs in Tamil Nadu, with more than 8,500 farmers registered on the platform. Since April 2017, under a pilot in Kanchipuram district at multiple FPOs, over Rs 3 million has been directly transferred into the bank accounts of marginal farmers for selling milk at rural aggregation centres. Loans worth Rs 7.3 million to 173 farmers and repayments are being tracked digitally, and till now, Rs 300,000 in the form of repayments has been paid to the banks through KANCHI.

What is not clear is if these programmes help small and landless farmers without credit history get access to bank loans, the funding pattern of this project, and future plans for expansion, if any. CB’s questions received no response.

The platform was unveiled by Thiru Banwarilal Purohit, governor of Tamil Nadu, who, as per the press release, said, ‘Nearly 68 per cent of our population is in rural India and involved in farming. We need to make agriculture a profitable and sustainable business. We should empower farmers and bring them within the digital wave of India. Government of India has increased the allocation for agriculture credit but it is important that credit reaches the right recipient.’

CDFI, based in the Institute for Financial Management and Research, focuses on research and innovation for financial mainstreaming the poor. It works across sectors such as banking, education, agriculture, governance, healthcare, nutrition, enterprise and SHGs, and partners with state and central governments. NAF is a public charitable trust working on education, environment and empowerment, and is an empanelled resource institution by Small Farmer Agri-Business Consortium (SFAC), under the Ministry of Agriculture, for promoting FPOs.