Presentation Fin4Ag S21 by Arijit Dutta

1. Agri Value Chain Finance –
BASIX experience
Fin4ag Conference
Nairobi, 16th. July 2014
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2. The BASIX Mission…..
To promote a large number of sustainable
livelihoods, including for the rural poor and
women, through the provision of financial
services and technical assistance in an integrated
manner
BASIX will strive to yield a competitive rate
of return to its investors so as to be able to access
mainstream capital and human resources on a
continuous basis.
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3. Evolution of Financial Structure
Soft Loans from Donors & Development Banks
(GTB, CIDA-DID, CordAid, SIDBI, ICICI, HDFC)
1996-98
Grants and Soft Loans from Donors (Sir Ratan Tata
Trust, Ford Foundation, Swiss Agency for
Development Cooperation)
1998-2000
2001
2001 onwards
2007-08
Equity Investment
(IFC, Shore Bank, Hivos Triodos, ICICI and HDFC)
Loans from Commercial Banks
(ICICI Bank, HDFC Bank, ABN Amro, ING
Vysya)
Mainstream Equity
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4. • IMRB study – Impact of
micro-credit
Results
Increase in income - 52%
No change in income -25 %
Decline in income - 23%
Findings
• Unmanaged Risks
• Low Productivity
• Low Price Realisation
Credit is necessary but not
a sufficient condition for
livelihood promotion
Review of BASIX Work
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5. BASIX framework
BASIX utilizes financial, human and intellectual capital to work towards brining equality of opportunity and social justice 5

6. Collaborative Polygon
We propose collaborating with players having domain expertise to provide ………
Financial Services
Linkages with Banks & MFI’s
Training & Extension
Agril Universities, Ag. Research
Stations, Agril Departments,
Digital Green, Agriwatch,
Institutions
NGO’s, village govt. & other
village level community
Institutions
Service Providers
Artificial Insemination,
Vaccination, Soil testing,
Insurance
Output Market
Linkages to organised
buyers, processors etc..
Input Supply
Agri Input companies,
wholesalers', dealers,
Enhance competencies,
Reduce transaction costs
and Reduce risk for farmers
by integrating all services
FARMERS
The task is too complex for any single
actor. Hence there is a need for
multilateral partnerships or
“Collaborative Polygon”. However, it is
useful for one actor to be the anchor,
who understands both development &
finance markets for the Collaborative
Polygon to work.
BASIX tries to play that role.
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7. BASIX Outreach – Agri Value Chain
Finance
•No. of customers: 1.05 million
•Amt. disbursed (million USD): 230
•Repayment: 97%
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8. Livelihood
Financial
Services
Cotton crop
technical
Services
Institutional
Development
Services
Farmers
Ginning
BASIX – Cotton Value Chain Finance
Lint Pressing unit-
Conversion to
Bales
Farmers
Farmers
National Commodity Derivatives Exchange
(NCDEX )
Trading Platform
Formed into cotton
Producer Group
BASIX
Warehouse
Receipt
BANK
Loan
Assured
PriceSeeds,
Fertilizers,
Pesticides
NCMSL
Godowns
Supper Spinning Mill
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9. Dairy Value Chain: BASIX - Reliance Dairy
Company Collaboration
DAIRY
FARMERS
INPUTSUPPLY
BASIX
OUTPUTMARKET
RELIANCE
Milk supplied to
Bulk Milk Coolers
Financial &
Dairy Extn
Services
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10. Potato Value Chain Financing
Frito Lays India Limited
Potato Growers
BASIX
Credit Ext. services
Gr.
formation
Potato
Seed
Buy back
arrangement
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11. BASIX learning's on value chain finance
• Agricultural value chain
financing requires a credit plus
approach
• Within financial services it
needs to span insurance and
commodity derivatives
• Organising farmers into
groups/coops and a well
designed institutional
development support service
• Finance for development of
value chain has to be invariably a
collaborative approach to bring in
all the players
The Downsides
• Procurement & default
• Input supply & crop
failure
• Flaws in agreement /
Contract
• Biased contract
• Sustainability
implications
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12. 12
Head Office
3rd Floor, Surabhi Arcade, Bank Street, Koti,
Hyderabad 500 001
Telengana
Phone: + 91-40-3917-2500 Fax: + 91-40-3917-2502
Website : www.basixindia.com
Registered Office
D 9, First Floor, Greater Kailash Enclave - I,
New Delhi 110 0 48.
Ph: 011 4173 0252 , 011 4173 0454
Website : www.basixindia.com