Sanjay Mariwala

Mar 4, 2019

Jai Kisan aims to make credit access easy for small farmers Jai Kisan has raised $1.5 million from early-stage venture capital firm Blume Ventures, Prophetic Ventures, Better Capital, Harshbeena Zaveri of NRB Bearings, Sanjay Mariwala of OmniActive, and others Digbijay Mishra  |  TNN  |  March 04, 2019, 10:00 IST In September 2017, 27-year-old Arjun Ahluwalia moved back to India after spending half a decade at private equity major Abraaj Group in New York. He wanted to address the issue of farmers’ access to capital. Ahluwalia found support in Adriel Maniego , a Filipino who was working at Alvarez & Marsal, a professional services company in Texas. The two had met in 2011 when they were doing their bachelor of business administration from Texas A&M University. Both were passionate about emerging markets and soon became friends. Before moving to India, Ahluwalia asked Maniego if he wanted to join him. Maneigo, 27, took just three days to decide and was soon on a flight to India. The two founded a venture called Jai Kisan. “We spent about six months in a village in Nashik to get to know the farming communities,” Ahluwalia told TOI. After a pilot of about eight months, the company started working in Maharashtra and Karnataka to make capital easily accessible to farmers. They have just raised $1.5 million from early-stage venture capital firm Blume Ventures , Prophetic Ventures, Better Capital , Harshbeena Zaveri of NRB Bearings, Sanjay Mariwala of OmniActive, and others. The company is applying for an NBFC license so it can lend directly. Now it works with lending partners to facilitate loans to farmers and connects farmers to farm equipment sellers. Jai Kisan works with small and large landholders. Small farmers borrow between Rs 20,000 and 30,000, the bigger ones borrow in the range of Rs 1.5 lakh and 20 lakh. Jai Kisan subsidises small loan interest rates using the commission it gets on the sale of farm equipment. The lending rate at about 12% is much lower than that charged by other NBFC players. It’s not clear yet whether the model will work at scale. A senior partner at an impact fund said the model leaves much to be figured out at a later stage. “It’s risky to subsidise the loan rates via margins from other product partners,” the person said. From a loan book of a little under Rs 2 crore, Jai Kisan is looking at around Rs 30 crore by the end of the year. ”Eventually we want to work through securitisation. It will take time to get data sets and to build a good distribution network to make sure securitisation works,” said Ahluwalia. RELATED