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FinTech in the Agricultural Value Chain – Part 1

The agricultural industry of a country plays a paramount role in the economic development of a country. However, the industry continues to face multiple problems. The risks associated with the agricultural industry are beyond human control and are always contingent in nature. The underlying problem faced by the industry is a long-time lag between input investment and profit realization. There are problems and risks on both ends, i.e., the supply-end (where investors face various risks in providing credit to farmers) and demand-end (where farmers face uncontrollable risks and hesitate to obtain financial support that is necessary to increase their production). Let’s have a look at such problems, solutions to the problems, and practical challenges relating to the same by covering the following three main topics:

Agricultural loan trends and challenges

The main challenges here are on the lending side as they have to design loan structures that have a longer maturity period, design seasonal loans for various crops, and manage their liquidity and interest risks at the same time. Also, the time taken for processing and disbursing the loan should be kept minimum as the agricultural activities are time-bound. Del ...

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