Mastercard partners LEAF to expand financial inclusion of more than 1mn farmers

Mastercard partners LEAF to expand financial inclusion of more than 1mn farmers

Mastercard announced a partnership with Lawrencedale Agro Processing India (LEAF), India's premier agriculture value chain enabler, to develop the LEAF Farmer Network, which would help more than one million Indian farmers gain access to financial services (LFN).

To address India's various difficulties of transparency in the rural ecosystem, this platform will use technology and human involvement to enhance the lives of Indian farmers.

In Andhra Pradesh, Karnataka, and Tamil Nadu, it will provide farmers more leverage with digitised harvest data, improve access to markets, provide expertise on better crops, and bring transparency to the supply chain by linking directly with purchasers. This is vital for farmers in these states. This will help farmers become more resilient, as well as promote the government's goal of creating a "Atmanirbhar Bharat".

India's agrarian sector is dominated by smallholder farmers, who are subject to severe opacity and are reliant on middlemen. Farmers have difficulties at every step, whether it's finding high-quality farming products, getting the most out of their produce, or getting paid through a formal credit channel.

Agrarian ecosystem actors are limited by a lack of transparent access to actionable information," stated LEAF's founder and CEO, Palat Vijayaraghavan. By establishing a virtuous loop between farmers and markets, digitization is able to remedy this problem by improving access to information. As a result of our years of effort, we are thrilled to partner with Mastercard to help marginalised farmers make a positive shift in their lives.

Transparency will be enabled for price negotiations, and end-to-end logistics will be managed with strict quality control as a result. Farmers are in charge of the entire process and are assisted by LFN agents.

"The core of LFN is the digitalization of the process of purchasing produce. With a specialised farmer advisory and change management staff on the ground, it's a high-touch model. For this, Mastercard has given rural-relevant phone-driven and internet-agnostic technology," Vijayaraghavan remarked.

In order to build a commercially sustainable ecosystem that includes all relevant stakeholders in the agriculture value chain and equitable commercial exchange mechanisms for all of the parties, it will digitalise the marketplaces, payments, processes, and farmer transaction histories. Through thorough training and capacity building throughout the harvest's full lifecycle, this effort will help farmers save money by reducing waste.

Mr. Nikhil Sahni, president of Mastercard's South Asia division, stated: "Mastercard has made a long-term commitment to helping small businesses and individuals get connected to the digital economy so they can realise their full potential. Using all of the company's resources — people, data insights, technology, and philanthropy – we create solutions for long-term, inclusive growth. It's encouraging to see initiatives like the LEAF Farmer Network springing up. In order to ensure that farmers have direct access to the knowledge, skills, and markets that they presently lack, it will use the power of digital technology to bring key stakeholders from throughout the agri value chain together. With the help of LEAF, Mastercard is thrilled that this programme will have a real impact on farmers' incomes, helping the Indian government achieve its aim of doubling farmers' incomes in the next two years."

As a result of the rural economy being predominantly cash-based, low account balances, and high servicing costs for banks, banks struggle to provide efficient service to the rural ecosystem. As a result, the majority of farmers have no established credit history and so cannot use any formal financial services. Providing farmers with the ability to accept digital payments via LFN will encourage them to keep their accounts active. Instead of visiting their local bank branches or business agents, farmers will be paid through their existing bank accounts or cards optimised for offline rural use, allowing the digital money to be liquidated.

Farmers will be able to save more money as a result, which will encourage them to stop using illegal money lenders. As a result of financial inclusion, farmers are more likely to pay their bills through official channels, which improves their credit score and enables them to obtain loans from financial institutions.

According to Ricardo Pareja, Mastercard's SVP of Sales and Market Development H&D, "Globally, Mastercard's commitment to financial inclusion and inclusive growth has never been greater. The farmer network was piloted in India two years ago, and today we are delighted to see that 110,000 farmers and 180 FPOs have benefited from it. We believe that by working together with LEAF, we will be able to make things easier for small and marginal farms. According to Mastercard's vision, it will be possible to enable 10 million farmers adopt digital technology and join the formal economy by doing so. The cooperation will provide 360-degree intervention and improve agricultural trade openness while preserving the ecosystem's worth."

LFN is an expansion of Mastercard Farm Pass, an Andhra Pradesh pilot initiative launched in 2018. For the rural population, Farm Pass is a vital part of Community Pass, a shared, interoperable digital infrastructure that makes critical services more accessible while also reducing costs. Farmers in India and East Africa now benefit from Farm Pass, which increases their incomes by 25-50%.