Main Points In Hindi (मुख्य बातें – हिंदी में)
Here are the main points summarized from the passage:
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Agricultural Significance and Challenges: India, with a farming-dependent population of 42%, faces a critical challenge as agriculture contributes significantly to its GDP but has shown slow growth. Smallholder farmers, who form the backbone of this sector, require a shift to higher-value crops, highlighting the need for targeted solutions.
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Struggles of Agritech Startups: Several successful agritech startups like DeHaat and WayCool have achieved significant funding but are now struggling with losses and market saturation. Many startups are failing to meet the complex needs of farmers, pointing to a disconnect between developed solutions and real agricultural challenges.
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Innovative Solutions by SLCM: Sohan Lal Commodity Management (SLCM) has emerged as a leader in agri-warehousing and financing through innovative "phygital" solutions, including AI-driven quality checks and real-time monitoring systems, leading to significant profitability and growth in the agricultural sector.
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Impact of Technology on Efficiency: SLCM’s patented technology not only reduces crop damage but also transforms agricultural commodities into viable assets for financing. Their initiatives in streamlining quality checks and enhancing market access show potential for increasing efficiency across India’s agri-supply chain.
- Focus on Financial Inclusion: SLCM’s financing arm, Kissandhan, is making strides in providing flexible, need-based loans, particularly targeting women and smallholder farmers. This strategy has empowered numerous individuals and indicated a strong commitment to supporting sustainable agricultural growth in India.
These points encompass the critical aspects of India’s agricultural landscape, highlighting both the challenges faced and the innovative solutions being implemented.
Main Points In English(मुख्य बातें – अंग्रेज़ी में)
Here are the main points extracted from the provided text regarding the agricultural landscape and the performance of Sohan Lal Commodity Management (SLCM) in India:
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Agriculture’s Economic Importance: Agriculture plays a crucial role in India’s economy, with over 42% of its 1.4 billion population relying on farming for their livelihoods. Despite its significance, agriculture has shown modest growth, contributing 18.2% to the GDP and growing at an average rate of 4.18% over the past five years.
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Challenges Faced by Agritech Startups: Agritech startups, while gaining funding and attention, are facing significant challenges, including operational struggles and difficulties in differentiating themselves in a crowded market. Notable startups like WayCool and DeHaat have reported losses, demonstrating the complexities of operating in the agricultural sector.
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SLCM’s Innovative Approach: SLCM has successfully implemented a "phygital" model that combines physical and digital solutions to enhance agricultural warehousing and financing. By focusing on real-time monitoring, AI technology for quality checks, and rigorous security measures, SLCM has reduced food grain loss and improved operational efficiency.
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Agricultural Financing: SLCM’s financing arm, Kissandhan, offers flexible, commodity-based financing to farmers, shifting from larger loans to smaller, targeted loans that empower smallholders and women borrowers. This approach aims to enhance financial accessibility and promote sustainable growth among farmers.
- Future Outlook and Strategic Expansion: With ambitious revenue targets and innovation-driven strategies, SLCM plans to expand its operations and product offerings. The company is positioning itself to capitalize on India’s growing agriculture and agritech markets while navigating challenges such as global geopolitical issues and local market demands.
Complete News In Hindi(पूरी खबर – हिंदी में)
India, an agricultural powerhouse where more than 42% of its 1.4 Bn population rely on farming for their livelihoods, stands at a critical juncture and requires a wave of transformative push. Consider this. Agriculture accounted for 18.2% of the nation’s GDP (at current prices) but grew at an average annual rate of 4.18% in the past five years, per The Economic Survey 2023-24.
The anomalies don’t end there. India still leans heavily on cash-strapped, ill-equipped smallholder farmers for agri operations. Even the latest Economic Survey emphasised the need to shift them to high-value crop production, spotlighting the role of agritech startups in this transformation. But these startups may not be a panacea for all agribusiness issues.
In spite of success stories like DeHaat, WayCool, Ninjakart and Absolute Foods – each raised $100 Mn+ in funding – many are now struggling to stand out in a crowded field filled with similar services and business models.
Take WayCool, for example. At one point, the startup was said to be on track for a 2025 IPO, it has hit a rough patch, marked by layoffs and mounting losses.
Others like Mooofarm and Reshamandi face similar setbacks and continue to search for a breakthrough. Even Dehaat reported INR 1,133 Cr in loss in FY24, higher than the net loss in the previous year. So what went wrong?
Sandeep Sabharwal, founder and CEO of Sohan Lal Commodity Management (SLCM), a 15-year-old agri-warehousing and agri-financing platform believes the problem is that entrepreneurs do not focus on solving the real problems for agri stakeholders. “The real challenge in agriculture lies in perception. We need solutions built for the specific and complex requirements of farming, not borrowed solutions from other industries. It often leads to misrepresentation and failed ventures,” he added.
A team of four started the business in 2009 with an initial investment of about INR 16 Lakh, SLCM’s Sabharwal claimed the company looked to solve the challenges in agriculture with ‘phygital’ solutions and a bootstrapped mindset.
Among these are secured commodity storage, AI-powered quality checking, market linkage, procurement at best prices for buyers and agri supply stakeholders. The other focus area is agri-financing via Kissandhan, a rebranded NBFC acquired a decade ago to facilitate agri-loans.
Today, SLCM has set up a tech-enabled network of more than 17K agri-warehouses across 13 Indian states and a portfolio of 350+ diversified warehousing facilities (a combination of agricultural and non-agricultural storage) in Myanmar. It runs 19 cold storages in India covering more than 304 Mn sq ft, with a throughput capacity of 4,507.88 Mn metric tonnes (MMT) and a DAUM (daily assets under management) of approximately INR 11K Cr (as of October 31, 2024).
“Despite this expansive infrastructure, we don’t own any warehouse space ourselves, not even a single foot. SLCM operates solely on a leasing model,” Sabharwal told Inc42, underscoring the benefits of third-party warehousing.
“This arrangement keeps our capex low and increases operational agility. For example, we can set up storage facilities in any part of the country within 24 hours as per client requirements. Our asset-light model has proven to be a profitable, long-term strategy that has succeeded in the market,” the SLCM CEO added.
While the company has raised close to $50 Mn in its lifetime, the last round came in 2019 and since then SLCM has relied purely on its revenue to scale up. That’s largely thanks to the asset-light model and a reliance on technology, the very same pillars that agritech startups rely on, but without the profits to show it like SLCM.
Putting The Tech In Agritech
But there’s more to its success than asset-light strategies. SLCM secured two path-breaking technology patents. The first was awarded in 2021 for a real-time data management method integrated with a centralised process to monitor and manage crop security. Due to regular audits and meticulous tracking, it reduces the risk of crop damage to 0.5% across the company’s warehouses and secures storage against theft and fraud. India loses an estimated 10% of its food grains annually due to a lack of storage and outdated techniques.
The Federation of Indian Chambers of Commerce and Industry (FICCI) assessed food crop waste using this model and published a report highlighting its potential to enhance storage efficiency.
The second came in 2022 for an AI-based app that initially assessed wheat quality on the spot by analysing the crop image for multiple parameters. The app’s capability will gradually increase to quality-check major crops and pulses. SLCM also launched Agri Suraksha, a centrally controlled and monitored 24×7 warehouse surveillance system.
Sabharwal attributes the success to the company’s innovation culture and a divisional focus minus the silos. “At SLCM, we have always viewed agriculture as a physical and digital blend. Agritech is a subset of this phygital world. Now that we are at the forefront of this phygital world, turning crops into an asset class, it validates our model,” he said.
A quick look at the financials also supports this uptick. The agritech firm reported revenue of INR 482.36 Cr and created more than 5K direct and indirect jobs in FY24. Net profit jumped 475% YoY to INR 17.65 Cr from INR 3.1 Cr in the previous fiscal year.
It is a significant milestone as SLCM posted consecutive losses during FY20-22 and turned profitable only in FY23. For context, the numbers provided here are consolidated, with its Myanmar operations contributing about 8% of the net revenue.
Buoyed by the growth, SLCM registered as a public limited entity in July 2024, a strategic move indicating it is now on course for a public market listing. According to Sabharwal, the shift marks a deep commitment to corporate governance and better organisational maturity.
Reinventing Agri-Warehousing
As agri-warehousing is the cornerstone of SLCM’s operations, Sabharwal recognised that the company needed to build systems for rigorous quality audits, real-time security monitoring and instant data communication to prevent crop loss, theft and fraud.
The founder was aware of common vulnerabilities like pilferage by local employees or the lack of constant monitoring in remote warehouses with limited infrastructure. Setting up traditional CCTV systems is not always feasible due to logistics hurdles and prohibitive costs.
SLCM employs three critical safety components for a multi-layered security system to minimise these warehousing risks. These include:
AgriReach: Developed in-house within a year of inception, this patented method integrates real-time security monitoring, audits and other essential processes to safeguard warehouses, keep tabs on crop health and provide a standard operating procedure (SOP) in all facilities.
Using geofencing, bar-coded storage receipts and internal audits backed by a Maker-and-Checker policy (dual authorisation), SLCM carries out real-time monitoring of goods and personnel and the same is updated via a management information system (MIS). It also helps monitor temperature and humidity within the warehouses.
As this unique management system reduces food grain losses to a meagre 0.5%, it can save more than INR 87K Cr annually, claimed Sabharwal. Additionally, SLCM implemented SAP in a record six months to automate the entire process, the first company to do so in the agri-warehousing space.
Under AgriReach, there is a centralised digital directory connecting farmers with buyers, traders, food processors and exporters. With around 2 Lakh registered users and 88 commodities listed, the directory enables seamless transactions anytime, anywhere, providing critical market access across the country’s agricultural community.
Agri Suraksha: Launched in 2020, Agri Suraksha uses solar-powered, weatherproof CCTV cameras with 3G SIM connectivity to relay live footage from warehouses to a central command centre in Delhi. This low-cost, mobile-enabled security solution covers all warehouses, even the most remote or temporary units, bypassing the need for stable power sources.
E-lock: SLCM has launched a centralised e-lock system for high-value warehouses storing agri produce worth INR 10 Cr or more. This digital lock can be opened from the command centre alone, eliminating the access of local managers to physical keys and ensuring continuous surveillance of valuable stockpiles. This phygitisation, or digital tech security measures for physical assets, provides 360-degree protection regardless of locations and infrastructural constraints.
“Currently, around 60% of SLCM’s AUM is under real-time surveillance, strengthening security and reducing risks,” said Sabharwal.
How SLCM Turns Crops Into An Asset Class
To elevate the value of agricultural staples like wheat and turn them into an asset class, these must meet a host of critical criteria for securitisation. While weight can be reliably measured at weighbridges, quality checking or QC services must be expanded. NABL-accredited labs typically perform these quality checks, but only around 300 cater to the agricultural sector. This limited capacity leads to the following logistical and financial bottlenecks, slowing down transactions and access to capital.
- Long delays: Sending samples to full-fledged labs for quality checks results in a long turnaround time
- Risk of fraud: The possibility of sample switching raises questions about the credibility of QC reports
- High costs: Due to delays in obtaining QC results, farmers and traders have to bear opportunity costs. This impacts cash flow and leaves buyers needing clarification about product quality
To address these pain points, SLCM developed an AI-driven app under the AgriReach umbrella to redefine the QC process. By capturing a single photo of a commodity, the patented app delivers QC results in just 90 seconds, a massive reduction from the conventional two-day timeframe that enables banks and FI to process loans within hours.
The company also runs a NABL-accredited central analytical laboratory to ensure quick and accurate testing, and its results are accepted in several countries.
“In a world where consumers can return an online purchase within hours, waiting days to verify crop quality seems obsolete,” said Sabharwal.
Developing this app involved extensive research, analyses of more than a million samples and rigorous trials. SLCM eventually secured an NABL accreditation for its QC app, the first of its kind in India and possibly worldwide, claimed Sabharwal. By October 2024, the app had done 213K quality checks across 22 states, covering 9.32 Mn metric tonnes of crops.
The breakthrough spurred rapid growth, with assets under management soaring from INR 1,039 Cr in 2020 to INR 12K Cr+ in 2024. Although the NABL accreditation applies only to wheat, SLCM is working to obtain certifications for other crops like maize, rice and chana (chickpea).
“India produces 325 Mn metric tonnes of dry agricultural commodities, and our app has tested 9.3 Mn metric tonnes or 2.66% of the total. This shows our scalability and removes the infrastructural bottlenecks from the collateral process and value chain management,” said Sabharwal.
Beyond this, SLCM has developed a commodity facilitation platform to create a streamlined digital marketplace across the sector. It serves as a business hub, enabling companies to present their products and services. Users can also buy and sell food grains and find logistics/transport partners based on location preferences, making the supply chain more accessible.
To expand its QC initiative, SLCM has introduced the AgriReach Krishi Quality Janch Kendras. These centres will do rapid quality checks and provide on-the-spot QC certifications for food grains, reducing wastage and creating rural employment tailored to local skill sets.
“So far, Krishi Quality Jaanch Kendra has appointed 300+ authorised QC partners in 11 states,” said Sabharwal.
The Last Piece In The Puzzle: Agri-Financing
Kissandhan, the finance arm of SLCM and an RBI-regulated NBFC, is redefining agri-finance with innovative products. Its flagship is commodity-based financing (CBF) for flexible and collateral-free loans across locations and commodity types. Unlike other NBFCs, this flexible approach has positioned Kissandhan as a vital resource for farmers and agribusinesses all over India.
As Sabharwal emphasised, diverse financial solutions enable farmers and agri-businesses to access flexible, need-based funding that promotes sustainable growth and strengthens economic resilience. So, SLCM has recalibrated its lending portfolio to become more granular.
Earlier, the loan amount ranged between INR 3 Cr – INR 5 Cr, but now SLCM offers tailored products for FPOs with loans averaging INR 8 Lakh for each unit. This has positively impacted as many as 80K farmers.
As smaller, targeted loans are now available for a broad range of clients, more than 37K women borrowers receive INR 35K each for a maximum tenure of 18 months, marking a shift towards more accessible, retail-level agri-financing. The maximum loan amount extended to a woman borrower has now reached INR 1 lakh for a flexible tenure of 12-24 months, with no collateral required. In total, loans disbursed to women currently amount to INR 155 Cr.
This strategic move towards more granular and inclusive financial support has boosted SLCM’s return on investment and enhanced borrowers’ loyalty and continuity. “It aligns with our diversified warehousing model of building a robust, wide-reaching base and is expected to drive growth and profitability by 2027,” said Sabharwal.
As of June 2024, Kissandhan cumulatively disbursed INR 2,927.52 Cr and supported 36,839 clients, 107 FPOs and 36,444 women beneficiaries. The impact has been broad-reaching and economically empowered more than 7.6 Lakh people.
Agritech Startups Hamstrung By Challenges
After investing more than INR 9.5 Cr in technological advancements in the past two and a half years, SLCM is eyeing net revenue of INR 781 Cr in FY25, a 62% jump from INR 482 Cr in FY24.
Its EBITDA is projected to climb from INR 39.48 Cr to 63 Cr, while profit after tax is expected to reach INR 24 Cr. However, the company must overcome operational and industry hurdles to hit these numbers.
A key challenge is expanding its loan book without pushing costs. SLCM has successfully reduced sourcing costs and boosted ROI from 12.1% to 16.5% by doubling the average loan tenure from nine to 18 months. This approach enhances customer retention and grows the company’s wallet share in agri-financing.
“Our goal is to capture the entire financial life cycle of customers,” the company states, likening its strategy to the models used by financial services powerhouses like Bajaj Finance.
It is also testing artificial intelligence for enhanced loan management. But this is still a work in progress, as commercial rollouts require a cautious approach.
Although these measures will solidify SLCM’s position as a trusted agri-financing resource and one-stop destination for all post-harvest needs, the company faces industry-wide challenges like its local and global peers.
For starters, crop quality assessment is critical for agricultural commodities and constant benchmarking is required to strengthen India’s position as a global supplier. Ongoing geopolitical conflicts have also prompted the company to delay planned expansions into Southeast Asia despite promising socio-economic similarities in markets like the Philippines and Laos (officially, Lao People’s Democratic Republic or LPDR). Additionally, SLCM will carefully consider IPR protection before licensing its technologies abroad and only focus on countries with robust legal frameworks.
While global growth remains on the cards, the company is exploring the domestic market, given the country’s positive trajectory in agriculture and agritech space. The agriculture market size in India is estimated to reach $473.7 Bn by 2029, while agritech is expected to hit $25 Bn by 2025, signifying a transition from a nascent stage to mainstream prominence.
SLCM is carefully building its strategic roadmap and sustainable initiatives around finance, phygital solutions and global expansion, which will resonate with the new era of action in agriculture. Of course, a perfect storm of risks is brewing outside as agri produce needs to be cleaner, greener and more ethically procured despite climate woes and socio-economic hurdles that have long hindered farmers’ productivity and a relevant increase in their net economic value.
However, mindsets are changing, laws are becoming more favourable, and innovations are coming to the fore to transform this landscape. And it is nothing but good news for smallholder farmers in India and agri-service providers like SLCM.
[Edited by Sanghamitra Mandal]
Complete News In English(पूरी खबर – अंग्रेज़ी में)
India, a major agricultural country where over 42% of its 1.4 billion people depend on farming for their income, is at a crucial point and needs significant change. Agriculture contributes 18.2% to the nation’s GDP, yet it has only grown at an average of 4.18% per year over the last five years, according to The Economic Survey 2023-24.
There are several challenges to address. India still relies on smallholder farmers who often lack financial resources and proper tools for agricultural operations. The Economic Survey pointed out the need to transition these farmers to more profitable crop production and highlighted how agritech startups can help in this change. However, these startups may not solve all the issues facing the agriculture sector.
Despite some successful examples like DeHaat, WayCool, Ninjakart, and Absolute Foods, which have each raised over $100 million, many startups are having difficulty standing out in a competitive market filled with similar services and business models.
For instance, WayCool, once predicted to go public by 2025, is now facing difficulties and has experienced layoffs and significant losses.
Other companies like Mooofarm and Reshamandi are facing similar challenges and continue to look for solutions. Even Dehaat reported a loss of INR 1,133 crore in FY24, which was greater than its loss the previous year. So, what went wrong?
Sandeep Sabharwal, founder and CEO of Sohan Lal Commodity Management (SLCM), an agri-warehousing and financing platform established 15 years ago, believes that entrepreneurs need to focus on genuinely solving the problems faced by agricultural stakeholders. “The real challenge in agriculture is perception. We need solutions tailored to the specific and complex needs of farming, rather than generalized solutions that often lead to misunderstandings and failed businesses,” he noted.
SLCM, which started with a small team in 2009 and an initial investment of about INR 16 lakh, sought to address these challenges through a mix of digital and physical solutions.
These solutions include secure storage for commodities, AI-driven quality checks, market connections, and procurement at competitive prices for buyers and supply stakeholders. Another focus area is agri-financing through Kissandhan, a rebranded non-banking financial company (NBFC) acquired a decade ago to provide agricultural loans.
Currently, SLCM has established a tech-enabled network of over 17,000 agri-warehouses in 13 Indian states and has over 350 diversified warehousing facilities (both agricultural and non-agricultural) in Myanmar. It operates 19 cold storage facilities in India, covering more than 304 million square feet, with a storage capacity of 4,507.88 million metric tonnes and daily assets under management of approximately INR 11,000 crore (as of October 31, 2024).
“Despite this extensive infrastructure, we do not own any warehouse space; we operate entirely on a leasing basis,” Sabharwal explained to Inc42, emphasizing the advantages of third-party warehousing.
“This approach keeps our capital expenditure low and enhances operational flexibility. For instance, we can establish storage facilities anywhere in the country within 24 hours based on client needs. Our asset-light approach has proven to be a sustainable strategy, yielding success in the market,” he added.
Although the company has raised around $50 million over its lifetime, the last funding round occurred in 2019, and since then, SLCM has relied on revenue for growth. This is largely due to its asset-light model and focus on technology, which are also key elements that agritech startups depend on, but without the profitability seen in SLCM.
Incorporating Technology into Agriculture
More than just its asset-light strategy contributes to SLCM’s success. The company has obtained two innovative technology patents. The first, awarded in 2021, is for a method of managing real-time data connected to a centralized process for monitoring crop security. This method minimizes the risk of crop damage to just 0.5% across SLCM’s warehouses, protecting storage against theft and fraud. India loses about 10% of its food grains every year due to insufficient storage and outdated methods.
The Federation of Indian Chambers of Commerce and Industry (FICCI) evaluated food crop waste using this model and published a report outlining its potential to improve storage efficiency.
The second patent, obtained in 2022, relates to an AI-driven app that evaluates wheat quality instantly by analyzing crop images for multiple parameters. This app’s capabilities will eventually expand to assess the quality of major crops and pulses. SLCM has also introduced Agri Suraksha, a 24/7 monitored warehouse security system.
Sabharwal credits the company’s success to its innovation culture and a focus on effective divisions without bureaucratic barriers. “At SLCM, we regard agriculture as a combination of physical and digital elements. Agritech is just a part of this broader world. Being at the forefront of this integration allows us to validate our model of turning crops into an asset class,” he stated.
A glance at the company’s finances shows promising growth. SLCM reported revenue of INR 482.36 crore and created over 5,000 direct and indirect jobs in FY24. Its net profit surged by 475% year-on-year to reach INR 17.65 crore, up from INR 3.1 crore the previous fiscal year.
This is a significant achievement given that SLCM experienced consecutive losses from FY20 to FY22 and only became profitable in FY23. It’s important to note that the figures mentioned are consolidated, with its Myanmar operations contributing around 8% of net revenue.
Encouraged by this growth, SLCM transitioned to a public limited company in July 2024, signalling its intent to pursue a public market listing. According to Sabharwal, this move demonstrates a strong commitment to corporate governance and greater organizational maturity.
Revamping Agri-Warehousing
Agri-warehousing is the foundation of SLCM’s operations, and Sabharwal recognized the necessity for systems that ensure detailed quality audits, real-time security monitoring, and rapid data management to prevent crop loss, theft, and fraud.
The founder was aware of common vulnerabilities like theft by local workers and the lack of continuous monitoring in remote warehouses with limited resources. Traditional CCTV setups are often impractical due to logistical challenges and high costs.
To minimize these warehousing risks, SLCM incorporates three critical security components:
AgriReach: This patented method, developed internally within a year of inception, integrates real-time monitoring, audits, and other processes to secure warehouses, keep track of crop health, and provide standard operating procedures across all facilities.
It uses geofencing, bar-coded storage receipts, and internal audits under a Maker-and-Checker policy (dual authorization) for real-time monitoring of goods and personnel, which is recorded in a management information system (MIS). It also tracks temperature and humidity in warehouses.
By reducing food grain losses to just 0.5%, this system could potentially save over INR 87,000 crore annually, claimed Sabharwal. Additionally, SLCM implemented SAP in just six months, becoming the first company in the agri-warehousing sector to do so.
AgriReach also features a centralized digital directory that connects farmers with buyers, traders, food processors, and exporters. With about 200,000 registered users and 88 commodities listed, the directory enables smooth transactions across India’s agricultural community at any time.
Agri Suraksha: Introduced in 2020, this system uses solar-powered, weatherproof CCTV cameras with 3G SIM connectivity to provide live footage from warehouses to a central command center in Delhi. This cost-effective, mobile-enabled security solution covers all warehouses, including remote or temporary locations, without needing stable power sources.
E-lock: SLCM has developed a centralized e-lock system for high-value storage units containing agricultural products worth INR 10 crore or more. This digital lock can only be opened from the command center, ensuring that local managers cannot access physical keys and maintaining constant surveillance over valuable stockpiles. This approach, referred to as phygitisation, integrates digital security measures for physical assets, offering comprehensive protection regardless of location or infrastructure limits.
“Currently, about 60% of SLCM’s assets under management are under real-time surveillance, enhancing security and mitigating risks,” Sabharwal stated.
Transforming Crops into an Asset Class
To enhance the value of agricultural products like wheat and make them viable assets, they must fulfill several important criteria for securitization. While weight measurements can be reliably conducted at weighbridges, the quality checking process needs improvement. Currently, about 300 NABL-accredited labs handle quality checks for the agricultural sector, leading to logistical and financial bottlenecks that slow down transactions and limit capital access.
- Long delays: Sending samples to labs for quality checks results in lengthy turnaround times.
- Risk of fraud: There’s a risk of sample switching, raising credibility concerns about QC reports.
- High costs: Delays in obtaining QC results can burden farmers and traders with opportunity costs and affect cash flow, leaving buyers uncertain about product quality.
To tackle these issues, SLCM created an AI-driven app under AgriReach to revolutionize the QC process. By capturing a single image of a commodity, the patented app provides QC results in just 90 seconds, a significant reduction from the traditional two-day wait, enabling banks and financial institutions to process loans swiftly.
The company also operates a NABL-accredited central analytical lab for quick and accurate testing, with its results accepted in multiple countries.
“In a world where consumers can return online purchases in hours, waiting days to verify crop quality seems outdated,” Sabharwal commented.
Developing this app necessitated extensive research, analysis of over one million samples, and rigorous testing. SLCM secured NABL accreditation for its QC app, the first of its kind in India and possibly the world, as claimed by Sabharwal. By October 2024, the app had performed 213,000 quality checks across 22 states, covering 9.32 million metric tonnes of crops.
This breakthrough prompted rapid growth, with assets under management skyrocketing from INR 1,039 crore in 2020 to over INR 12,000 crore in 2024. Although the NABL certification currently only applies to wheat, SLCM is working to obtain approvals for other crops like maize, rice, and chickpeas.
“India produces 325 million metric tonnes of dry agricultural products, and our app has tested 9.3 million metric tonnes, or 2.66% of that total. This demonstrates our scalability and removes the logistical hurdles in the collateral process and value chain management,” Sabharwal explained.
Moreover, SLCM has established a commodity facilitation platform to streamline a digital marketplace within the sector. This platform acts as a business hub, allowing companies to display their products and services. Users can also buy and sell grains and find logistics/transport partners based on their location, making the supply chain easier to navigate.
To expand its QC initiatives, SLCM has set up AgriReach Krishi Quality Janch Kendras, which provide rapid quality checks and immediate QC certifications for grains, helping to cut waste and create rural employment based on local skills.
“So far, the Krishi Quality Jaanch Kendra has onboarded over 300 authorized QC partners in 11 states,” Sabharwal noted.
The Final Piece: Agri-Financing
Kissandhan, SLCM’s financing branch and an RBI-regulated NBFC, is transforming agri-financing with innovative products. Its primary offering is commodity-based financing (CBF), which guarantees flexible and collateral-free loans for various locations and commodities. Unlike other NBFCs, this adaptable approach has made Kissandhan a crucial resource for farmers and agribusinesses throughout India.
As Sabharwal highlighted, diverse financial products allow farmers and agribusinesses to access flexible funding tailored to their needs, promoting sustainable growth and economic resilience. Consequently, SLCM has refined its lending strategy to become more targeted.
Previously, loan amounts ranged from INR 3 crore to INR 5 crore, but now SLCM provides customized options for Farmers Producer Organizations (FPOs), offering loans averaging INR 8 lakh for each unit. This change has positively impacted approximately 80,000 farmers.
With smaller, targeted loans available for a wider array of clients, more than 37,000 women borrowers now receive INR 35,000 each for a maximum period of 18 months. The maximum loan amount has reached INR 1 lakh for women borrowers, with flexible repayment terms of 12 to 24 months and no collateral required. In total, loans disbursed to women have now reached INR 155 crore.
This strategic shift toward more specific and inclusive financial support has improved SLCM’s return on investment and strengthened borrowers’ loyalty. “It aligns with our diverse warehousing approach aimed at building a strong and wide-reaching base, expected to drive growth and profitability by 2027,” Sabharwal added.
By June 2024, Kissandhan had disbursed a total of INR 2,927.52 crore and supported 36,839 clients, including 107 FPOs and 36,444 women beneficiaries. The impact has significantly benefited over 760,000 individuals.
Agritech Startups Facing Challenges
After investing over INR 9.5 crore in technological advancements in the last two and a half years, SLCM projects net revenue of INR 781 crore for FY25, which would signify a 62% increase from INR 482 crore in FY24.
Its EBITDA is expected to grow from INR 39.48 crore to INR 63 crore, while profits after tax could reach INR 24 crore. However, to achieve these targets, the company must navigate operational and industry challenges.
A crucial hurdle is expanding its loan portfolio without significantly increasing costs. SLCM has efficiently lowered sourcing costs and raised ROI from 12.1% to 16.5% by extending the average loan term from nine to 18 months. This strategy not only enhances customer retention but also increases SLCM’s share of the agri-financing market.
“Our aim is to cover the entire financial lifecycle of our customers,” the company stated, comparing its approach to models used by financial services giants like Bajaj Finance.
They are also exploring the use of artificial intelligence for loan management. However, commercial rollouts of this technology will require a cautious strategy.
While these initiatives aim to solidify SLCM’s reputation as a reliable agricultural financing resource and a comprehensive provider for post-harvest needs, the company faces broader industry challenges similar to those encountered by its local and international counterparts.
For example, the assessment of crop quality is vital for agricultural products, and consistent benchmarking is necessary to secure India’s position as a global supplier. Ongoing geopolitical issues have led the company to postpone its planned expansions into Southeast Asia, despite favorable market conditions in countries like the Philippines and Laos. Furthermore, SLCM will meticulously consider intellectual property rights protection before licensing its technologies abroad, focusing only on nations with robust legal frameworks.
While global expansion remains a goal, the company is also turning its attention to the domestic market, given India’s encouraging trajectory in agriculture and agritech. India’s agriculture market is projected to reach $473.7 billion by 2029, and the agritech sector is expected to grow to $25 billion by 2025, indicating a shift from a budding stage to a mainstream industry.
SLCM is carefully crafting its strategic roadmap and sustainable practices around finance, blended solutions, and global growth, positioning itself well in this new era of agricultural development. Although challenges persist—such as a need for cleaner, greener, and ethically sourced agricultural products amid climate and socio-economic obstacles affecting farmers’ productivity and profitability—there are positive changes afoot.
Mindsets are shifting, regulations are becoming more favorable, and innovations are emerging to reshape this landscape. This heralds good news for smallholder farmers in India and service providers like SLCM.
[Edited by Sanghamitra Mandal]
