GuarantCo provided two partial guarantees to HSBC India for an INR 2.5 billion (c. USD 30 million) loan facility extended by HSBC India to Arya.ag, India’s leading grain commerce platform.

The proceeds of the transaction will be used to provide post-harvest liquidity to farmers, farmer producing organisations (FPOs) and small agri-enterprises, to bring them under the formal banking channel, which, in turn will help the farmers to unlock greater value for their crops.

This is GuarantCo’s first transaction in the agricultural sector in India, with a strong focus on financial inclusion and climate resilience. The sector has a significant presence in India, employing c.60% of the market’s workforce and contributing c.20% of its GDP. However, the full economic impact of agriculture is currently unrealised, with over half of farming households financially excluded from formal credit sources.

Arya.ag supports the financial inclusion of farmers by offering farmgate-level storage, instant finance against commodity, and market linkages for seamless commerce. This allows farmers, FPOs and agri-enterprises to avoid distress sales immediately post-harvest when prices are at their lowest, by storing commodities until off-season when prices appreciate to generate up to 30 percent higher returns.

Furthermore, Arya’s end users are impacted by climate change and face production losses either due to drought, flash floods or reduced ground water table, as well as unpredicted and increasing challenges from pest and diseases. The storage facilities provided by Arya, coupled with the financing and commerce solutions, help the affected farming communities to store what they have produced. This results in lower water and fertiliser usage, thereby reducing the stress on the environment and making farmers more resilient to climate change.