Sub-K to bring financial products for Agriculture, Dairy sectors
Hyderabad-based fintech firm wants to address the stress the farming community faces due to the informal funding system
Hyderabad: Hyderabad-based Sub-K Impact Solutions, which bridges financial service providers and customers/borrowers in rural and semi-urban India, is in the process of rolling out ethical agriculture loans, which are farmer-friendly and not exploitative.
Sub-K is partnering with agritech companies to get the right data insights to design and offer the right agriculture loans in collaboration with banks.
The company has applied for a non-banking financial company(NBFC) license to work on the agriculture and dairy sectors to provide the right loan/financial products for these sectors. It is keen to address the financial stress the farming community experiences due to informal sources of funding in the ecosystem, particularly in rural India.
Sasidhar N Thumuluri, CEO & MD of Sub-K told Telangana Today, “Farmers often face challenges due to private lending in the rural communities. There is a lot of compounding that happens when the funding source is informal. The borrowers are only able to service interest and not able to pay the principal, and things get tougher from thereon. We are seeing how we can bring ethical agriculture loans on our platform and address the farmers’ financial stress.”
He further added, “We are tying up with agritech companies to generate data on agriculture loans and analyze the requirement and risk, and then package good agriculture loans in partnership with banks. This year, we are going to launch agri-focused products and will soon launch pilots in that direction. This will help farmers to get loans at the right price, right time and right quantum so that they don’t have to depend on non-transparent funding sources.”
The company also educates rural borrowers not to borrow more than they need. Often, over-borrowing leads to problems and makes repayment unviable, and ultimately turns them into bad loans. Borrower education in rural communities creates the right credit culture and ecosystem.
“We have also tied up with banks and co-created certain products and services to encourage lending for new use cases. We have worked with a public sector bank to extend MUDRA (Micro-Units Development and Refinance Agency) loans in States such as Rajasthan, which later was extended to other States in the country, offering small ticket unsecured loans. Low-cost distribution is possible through our fintech model, which may not suit the conventional financial system,” added Thumuluri.
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