Learnings from BASIX, IndiaPresented By

Sasidhar Thumuluri and Reji Varghese

Innovative Lending Mechanisms for Reaching Smallholders

AgriFin Finance Agriculture Forum 2015May 11-15, 2015 – Istanbul, Turkey

Basix Social Enterprise Group

Engaged in livelihood promotion since 1996, covering the following activities for over two million low-income households in India and 10 developing countries:

Financial Education

Enabling Access to Banking by the Poor

Micro-Savings

Micro-Credit

Micro-Insurance

Remittances

Agricultural and Livestock Development Services

Institutional Development and Capacity Building

Vocational Training Services

Technology Solutions for Financial Institutions

Energy and environment solutions

Government to Citizen Services

Consulting Services for all above

As on now, 13 Entities in 10 Countries and 27 States of India covering more than 30,000 villages, 600 towns and two million low-income households

Multiple Products & Services

8000 plus Micro-Franchisees

3000 plus Staff

Partnering many Governments Institutions, Banks and International Agencies

Agri Portfolio and

Products offered by

BASIX

Portfolio Mix

$10 , 3%

$85 , 32%

$174 , 65%

Agri InvestmentLoansAgricultural Loans

Agri Allied Loans

Amt in $ Millions

$270 million loan

disbursements across

1.1 million small holders

Loans disbursed up to

60 to 70% of scale of

finance

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Agri InvestmentLoans

Agricultural Loans Agri Allied Loans

39,160

366,661

763,531

No of Loans

Loans disbursed in Kharif and

Rabi season

Agri Investment loans duration

to 36 to 60 months

Agri Allied and Agricultural

loans for 12 to 24 months

Agri Finance Products

• Agricultural Loans for Crop cultivation

– Cash Crops (Cotton, Chilli, Sugar cane, Ground nut etc)

– Field Crops ( Paddy, Maze, Pulses etc)

• Livestock Loans

– Dairy

• Purchase of Milch Animals (Local and cross breed)

• Purchase of fodder and feeds

• Construction of cattle sheds etc

– Non-dairy – sheep/goat rearing, fishery, piggery, poultry

• Agri Investment Loans

– Digging of bore wells

– Land Levelling

– Barren land conversion into cultivation land etc

– Orchards and plantations

• Agri Value Chain Financing through Farmer Groups

• Weather Index based Crop Insurance

Important factors for Agri-Finance Product Development

Character

Capacity

CollateralCapital

Conditions

Challenges in Lending to

Smallholders

Lender’s Dilemma

• Fragmented portfolio of small ticket loans• Limited MIS capability to track portfolio and

manage risk• High cost of client acquisition and delivery of

finance• Risk of crop loss• Lack of adequate/appropriate insurance• Lack of timely and low cost collection mechanisms

Input Supply

• Quality

• Availability• Infrastructure

• Knowledge

• Financial

Cultivation

• Production

• Price

• Operational

• Financial• Institutional

Storage

• Infrastructure

• Quality

• Technology

• Logistics

• Seasonal Glut

Processing

• Technology

• RM supply

• Human Resource

• Quality

• Govt. Policies

Marketing

• Infrastructure

• Storage

• Price

• Product Loss

• Govt. Policy

Risks along Agri Value Chain

NOT CLEAR ON THE PROBLEM

TRAVEL DISTANCE TO FIND THE SOLUTION

DELAY IN FINDING THE SOLUTION

AGRICULTURE EXPERT NOT AVAILABLE

?

???

???

Information and Infrastructure Gaps

Innovative Delivery Models

HAPPY FARMERS

Holistic Approach – Production Practices for Yield enhancement; Financial

Asset & Risk Management; Emergency Response System

CropLense

Soil Testing System Credit Scoring and Risk Manage

ment System

FPO

FPO

Under Development

Farmer EngagementLoan Portfolio Management

Loan Management

System Core Banking

Solution

Distribution and Collection

System (ViTran SP)

Insurance MIS

Weather Station

BINDAS Insurance Company

Data Servers

Crop Insurance

• Identify best suited local entrepreneurs to act as Business Correspondent Sub-

Agents (BCSAs)

– Convenient local access

– Able to arrange cash for one day business

– Trusted by local community

• Enable, Equip and Empower BCSAs to provide hassle-free service

– Technology installation, registration of BCSA with bank and setting up of the outlet

– BCSAs are trained to market various banking and payment services

13

Unique Business Correspondence Model

Savings

Credit

PensionInsurance

Bank Account Opening

(basic FI)

Mobile/DTH Top-ups/ Bill

payments

Electronic Remittance

Rural Digital Payments

(Agri, Dairy)

Merchant Payments

Farmer

A Range of Financial and Payment Services

offered through Mobile-enabled Technology

13 Bank Partnerships

A Wide Network of Agents

State No of outletsAndaman & Nicobar 5Andhra Pradesh 508Assam 85Bihar 31Chhattisgarh 291Goa 3Gujarat 44Haryana 67Jharkhand 11Karnataka 431Madhya Pradesh 148Maharashtra 218Meghalaya 7Mizoram 9Nagaland 2New Delhi 2Orissa 76Pondicherry 1Punjab 91Rajasthan 1274Sikkim 9Tamil Nadu 95Telangana 216Tripura 18Uttar Pradesh 246West Bengal 121Grand Total 4009

Technology Solutions

Portfolio Management System

Basix Portfolio

Management

System

Integration to Credit Bureaus

CRM

Loan Management

Financial Accounting

MIS – Portfolio Management

Modules

NEFT – Disbursements to

Customer Bank Account

Risk Management

GIS /Google Maps

Core Banking Design

Browser application for

Data entry

TechnologyAPIs

SQL Server

Oracle Database

.Net /Java

Mobile App for Field Transactions

Mobile Technology - State-of-the-art Distribution Channel for Financial Services

Famer group

formation

Efficient Loan Disbursement process

Capturing group and

Members information

in Basix LMS (Enrollment and Loan

Application)

Credit Bureau

check and Loan

approvals

Farmer withdraw loan amount

through Micro-ATM

Loan Disbursement

through Bank Transfer.

Credit to Farmer Bank

Account

Loan Officer

approaches

Farmer group

Loan Officer carries

mobile application

which works on

online and Offline

mode

Mobile app capable to

handle 20 to 30 group

collection with a single

entry transactions and

issue receipt thru

Bluetooth printer

Loan payment collection

SMS will be sent to the

customer’s Mobile as

proof of receipt of

payment

Mobile app send

collection details to

central server and real-

time updating of

customer records

Easy and Faster Loan Repayment Process

BINDAS enables to provide

insurance services with feasible

operation cost at rural locations

BINDAS integrated with

insurance companies cloud

applications to provide policies

and to process claims as real-

time transactions

Used at 4000 outlets across India

Farmers are covered with

weather index based Crop

Insurance

Number of policies processed

through BINDAS600,000

Total premium collected Rs. 180 Mn

Number of claims processed 120,000

Total claim amount received Rs. 72 Mn

BINDAS, Basix INsurance Distribution and Administration System

Enabling Technology Solutions for

Effective Loan Appraisal and Risk Management

CropLense

Soil Analysis Portal

Mobile Application Web Portal

Demo plot through VLE/

Govt Agencies/ SAUs /Research

centers

Group of Farmers

at a Time

Individual Farmers

A web portal for generating soil health

cards for farmers based on results

obtained from soil testing process

A software application will capture all

the details of soil test results and help

farmers get a readymade report on

Crop and Fertilizer recommendations,

using a robust recommendation engine

Report generated from the results of

soil test kit and Agro-Climate Zone -

Crop based ‘Recommendation Matrix’

Soil parameters such as PH, EC, N, P,

K other micronutrients and clay

percentage will be considered to

prepare the soil health reports

Soil Testing System

Farmer/Soil Details

Portal capture farmer

details, soil analysis

report and produce soil

health card which is

approved by Agricultural

experts

Soil Health Card

Broadcast voice call

/ SMS

.

.

.

.

.

.

.

.

.

.

FaRMTalk portal

FaRMTalk Box

Farmer 1

Farmer n

IVR

1. Sowing advisory

2. Pest management

3. Disease management

4. Weed management

5. Weather updates

6. Market prices

7. Schemes and Lucky draw

8. Demonstrations

9. Exhibitions

10. Greetings

11. Product launches

12. Buyer information

13. Sellers information

Reg

iste

red

u

sers

FaRMTalk*- Farmer Relationship Management Technology

* FaRMTalk – Product developed by iConcept Technology Solutions and partnered with Basix

Blank SMS

Missed callCall

Structured Farmer database in FaRMTalk

portal

Collect data

Call routing for language Load balancing Dropped call log

Upload

Portal

Farmer ID Farmer Name Mobile No. State District Taluka Village Crop Acreage (ac.)

MP101 Amol Mukund Roa 919441296620 Madyapradesh Indore Indore Aramghar Soybean 30

UP102 Amit Shanghvi 919440748465 Uttarpradesh Faizabad Faizabad Solanki Wheat 20

MP103 Amit Ghosh 919960844631 Madyapradesh Indore Indore Aramghar Soybean 12

MP104 Anil Panduranga 919440780171 Madyapradesh Indore Indore Aramghar Soybean 15

MP105 Ashwin Bhai 919676764676 Madyapradesh Indore Indore Aramghar Soybean 4

UP106 Bhagwanlal 919059260862 Uttarpradesh Faizabad Faizabad Kishanbhag Soybean 9

UP107 Dashran 919948784315 Uttarpradesh Faizabad Faizabad Kishanbhag Wheat 10

UP108 Pravinbhai Pansuriya919370645944 Uttarpradesh Faizabad Faizabad Kishanbhag Soybean 12

UP109 Ramkrishna Gorse 919979926119 Uttarpradesh Faizabad Faizabad Kishanbhag Soybean 14

MH110 Ravindra Deshmukh919423648585 Maharastra Aurangabad Aurangabad Sundarbhag Potato 24

MH111 Umesh D Borad 919703403870 Maharastra Aurangabad Aurangabad Sundarbhag Potato 12

MH112 Sudhir Chelar 919822936937 Maharastra Aurangabad Aurangabad Sundarbhag Soybean 10

FaRMTalk - Builds Farmer Database

Regional language

Enabled(voice calls)

Stay Connected with

Farmers,

Year round contact

programs

Targeted communication

Increase brand presence

Standardized messaging

FaRMTalk

Farmer

database

FaRMTalk Benefits

CropLense – A Mobile App for Expert Advise

• CropLense is a unique combination of mobile App and Online Forum

• Basix collaborated with iConcepts Global Technology Company, who has

developed this application

• Specifically made to share information or collaborate on queries related to

farming with various experts in the domain.

• CropLense is a field enablement tool that helps agri stakeholders

collaborate cost-effectively and with agility

• Mobile App helps the person on the field (farmer or field officer/VLE/ LRP )

capture high-resolution images of the crops that needs protection or

attention or for knowledge sharing, annotate the images with voice

messages, send it to an identified expert or a group, and then receive

comments, expert advice or solutions from farm consultants and

agricultural experts

CropLense – Process

31

CropLense in Field

Farmer reports problem from the field

Record / text the Problem

Field Officer shares the problemwith expert for solution or Farmer

reports directly to Experts

Expert diagnosis the problem and suggests solution (Via mobile or portal)

Experts sending solution to Field Officer or Farmer

Winning Formula for Successful Agri Lending

• Robust Core Banking Solution with Loan Management System and integrated Financial Accounting System – BankSoft

• Versatile technology for real time and fraud proof last mile delivery (application building, loan disbursement and repayment collection) – ViTran

• Strong MIS for Crop Insurance to enable efficient processing and tamper proof claim management - BINDAS

• Enabling technology solutions for effective farmer engagement, building farmer database, addressing farm level problems and ensuring productivity enhancement – FaRMTalk, CropLense, STP

• Automated credit scoring analytics solution that fetch data from all the above tools and generates usable data for enabling quick decision making on loan approvals – coming soon….!

sasidhar.t@subk.co.inrvarghese@basixindia.com

Thank You…

Let’s make millions of

farmers as ‘HAPPY

FARMERS’ with more

innovations….