Mastercard’s Agri Marketplace Connects Farmers, Traders, & Banks, To Benefit 10 Million Farmers

Mastercard has launched its Farm Pass platform in India to provide small farmers with a digital marketplace to sell their produce at fair prices while also benefiting buyers who are looking for sustainable sources of quality produce at favourable market prices.

Running on the larger Community Pass platform, Farm Pass has already onboarded over one million farmers across Maharashtra, Karnataka, Andhra Pradesh, and Tamil Nadu in just two years, becoming a top ten digital agriculture platform. The company aims to extend the platform to five more states: Himachal Pradesh, Assam, Odisha, Telangana, and West Bengal and benefit 10 million farmers by 2025.

According to Tara Nathan, executive vice-president of Mastercard's Community Pass, close to 150 million farmers in India are at the heart of a $650 billion agri and rural retail economy. However, the agriculture sector's economic potential is not completely achieved, and digital solutions could increase access and uncover opportunities.

Despite this, due to low smartphone ownership and unreliable internet connectivity, just 3-4% of farmers use digital tools on a regular basis. Financial institutions, as well as other commercial and public entities, are struggling to reach this group and provide digital services that could enhance the lives of small farmers and micro-merchants while also driving economic growth.

"I believe that digital technologies have enormous potential to transform and organise India's agricultural ecosystem." However, in order for these (digital technologies) to have a large-scale influence in farming communities, they must be low-cost and address rural infrastructure challenges, according to Nathan.

Mastercard Community Pass is an interoperable digital infrastructure designed for the rural environment, working offline in areas of intermittent connectivity to enable a network of agriculture, micro-commerce, health, and other services. The model is inclusive, serving everyone from smallholder farmers, rural entrepreneurs, and small traders to agritech, as well as large corporates and banks. By connecting disparate agritechs on a common infrastructure, Mastercard is supporting their growth and providing tailwinds. And, by crowding in multiple agri-techs and other service providers to the shared Community Pass platform, the cost to serve is reduced for everyone.

Mastercard brings its core competency of safely and securely digitising transactions to rural communities, doing this every day for nearly 3 billion consumers, and now doing this for over 3 million smallholder farmers around the world. By transacting through Farm Pass, smallholder farmers develop a financial profile that can unlock financing opportunities for working capital and inputs, enabling Mastercard’s partners to provide agricultural and financial services at a lower cost.

Smallholder farmers in India want immediate cash, yet less than half have access to legal credit and must rely on informal sources of loans with interest rates ranging from 35-60%. Few scalable loan solutions in the 8-18% range are available. Similarly, farmer-producer organisations and agricultural cooperatives face capital constraints. Simultaneously, financial institutions are unable to reach government-mandated priority sector lending quotas due to high acquisition and risk costs.

"Farm Pass mitigates this by bringing banks to farmers and providing banks with anonymized data, allowing our financial institutional partners to realise their rural banking strategies, drive financial inclusion, and innovate agricultural credit." "We have partnered with M1 exchange, India's largest invoice discounting portal, to launch India's first Ag invoice discounting platform," Nathan explains.

One of Farm Pass's key areas of interest has been assisting state governments in digitising their agricultural and rural ecosystems. The 'phygital' model of the company produces jobs for rural entrepreneurs, thereby supporting rural livelihoods across India. Mastercard is also introducing India's first 'offline' financial inclusion card, which will enable financial and non-financial transactions in rural areas.

source- Financial Express

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