BOB Financial Solutions Limited (BFSL), a wholly owned subsidiary of Bank of Baroda (BoB) and CreditAI Fintech Pvt Ltd (CAI), a Singapore and Bengaluru based farmer credit scanning and reporting company, have launched Unnati – a co-branded credit card exclusively for farmers. The card was launched as a contactless offer on the Visa network.
Farmers can benefit from agricultural inputs at any time
The Unnati The credit card will allow farmers to have agricultural inputs on time and at any time during the cultivation process. Farmer Producer Organizations (FPOs) will further help farmers understand and take advantage of the benefits of this card. The Unnati Credit card will operate in a “closed-loop system” with an “end-use monitoring” function to enable and trace agricultural credit to its last mile.
CreditAI’s proprietary mobile app and input store management system will ensure that the end use of credit is primarily for the purchase of inputs from FPO-owned input sales stores. The Unnati credit card is specially designed to allow farmers to use credit on a rotational basis to avoid delays in renewals. Initially a base credit limit will be provided and over time, once the farmer’s credit profile improves with more transactions and repayments, the limit can be increased based on the credit score the farmer’s personality and his real cropping needs.
CreditAI aims to positively impact the lives of hundreds of thousands of farmers, aided by the Unnati credit card, which will first be launched in Karnataka and then expanded to Maharashtra, Andhra Pradesh, Telangana, Tamil Nadu and other states in India.
Speaking at the launch, Sangram Nayaka, CEO, CreditAI noted “India’s agricultural sector is in a phase where it is ready to embrace innovations not only in the way cultivation is done using agricultural mechanization and automation or selling products online, but also in how farmers are now banking and accessing credit through digital platforms. The situation smallholders face is high interest loans which can be disastrous with just one bad loan causing them to lose their farm. On the other hand, lenders also have underwriting issues for this segment. This is the very reason why the penetration of digital lending has not accelerated as much as in urban segments. »
To overcome these challenges, CreditAI has designed a secure, closed-loop cashless network to ensure that financial institutions can seamlessly deploy credit using CreditAI’s unique platforms. Refunds are easier and more consistent. On the other hand, there is huge potential in the FBO space for facilitating credit on the side of inputs and commodity trade. “CreditAI is on this path to enable and strengthen the network of farmers and OPFs,” he added. “Leveraging this opportunity and space in the agricultural credit and lending segment, we have partnered with BFSL to create Unnati, the “co-branded closed-loop credit card system” focused on the rural and agricultural sector. We are convinced that this innovative credit card offer will make agricultural credit more easily accessible to farmers. »
Shailendra Singh, MD and CEO, BFSL said: “We are delighted to partner with CreditAI, an agricultural Fintech. CreditAI is doing a commendable job of bringing technology closer to the Famers through the closed-loop networks of FPOs. The Unnati co-branded credit card will provide seamless access to credit to farmers, as required by their crop cycles. To ensure that farmers, many of whom will be new to digital or cashless credit, are protected from misuse of their credit card, Unnati will operate as a closed-loop program and the card can only be used for agriculture-related inputs from the respective FPO network. We thank CreditAI for coming up with this idea and for also offering to be involved throughout the entire customer lifecycle, from identification and onboarding to educating customers and helping with repayment. We also offered a very low interest rate, in case the farmer would not be able to repay all of his outstanding amount at once. We believe that all the above measures will contribute to the adaptation of cashless credit among farmers and this program will create another example of future-oriented and technology-driven interventions for Bharat. We are very excited and hopeful about this unique Farmer Global Progress or Unnati program. »
Sujai Raina, Vice President and Head of Business Development at Visa India, said, “Visa is committed to being a network that works for everyone, everywhere; as such, we are delighted to partner with BOB Financial Solutions for the launch of this innovative and inclusive digital payment solution with CreditAI. The Unnati credit card will provide farmers with easy access to credit tailored to their needs and, by leveraging the Visa network, it will also provide them with a way to make transparent and secure payments.
CreditAI’s success in developing its technology would not have been possible without the investment and support of The Yield Lab Asia Pacific. Claire Pribula, Co-Founder and Managing Director of The Yield Lab Asia Pacific, said, “We are delighted to have been able to provide the necessary seed capital and relevant, seasoned subject matter expertise to support CreditAi’s journey to to marketing. Smallholder farmers provide 80% of global production. This rollout with BOB Financial is an essential first step in helping smallholder farmers produce more sustainably. CreditAI will have a highly scalable impact by dramatically reducing borrowing rates, rapidly providing loans to farmers where it was not possible before, achieving high repayment rates and positively impacting millions of farmers and their families.