PayAgri have identified a set of problems within the Agri value chain. In India, smallholder farmers are responsible for 85% of the farming and every year that increases with more fragmentation. Smallholder farmers in India and other developing countries face many challenges, and one of these is transparency amongst the supply chain. Beholden to middlemen, they buy inputs at high costs, sell their produce at lower prices, and all transactions are cash-based. Access to finance has been another big challenge due to lack of verifiable data. Institutional credit in agriculture was USD $125 billion in 2015, which constitutes only 53% of the actual credit required, leaving the rest dependent on informal lending. Technology has made limited or no intervention in the Agri space, particularly for smallholder farmers due to affordability.
PayAgri provides farmers with direct access to markets that remove middlemen and provides access to input providers, banks and financial institutions, as well as technology. As a farm-gate enabler, they orchestrate the entire transaction in an Agri value chain and digitize the transaction. This creates a transparent and holistic solution for farmers.
PayAgri works with aggregated farmers (such as a Farmer Producer Organisation) and digitizes the data of their farmer members, providing them with a transaction app to raise purchase orders and invoices. This helps create a transaction history enabling them to be bankable. Further support includes directly linking them with input manufacturers and creates markets for their produce with institutional buyers, wholesalers, retailers and even direct consumers. To support this activity payAgri has launched an online market place for Farmer Producer Organisations called payAgri e-Markets, where FPOs registered with payAgri can post their products online enabling institutional buyers to buy it online. Though the transactions are online it will be orchestrated by payAgri. They also provide affordable technology solutions, like digital soil analysis, through partnerships with AgriTech companies.
PayAgri does not charge the smallholder famers; the revenue comes from partners such as institutional buyers, input companies, banks, agro processing companies, FMCG, supermarket chains, online groceries, B2B companies and retailers.
They have so far digitised 2,700 farmers, generated revenue of USD $1.1 million in 2019-20, with an average gross margin of 15%. PayAgri aspire to be an impactful global company – without compromising the interests of farmers. As part of their global strategy, they plan to set-up export houses in nine major cities worldwide.