Arya.ag NBFC crosses ₹2,000 crore in commodity finance

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Arya.ag, a Noida-based grain commerce platform, has reached a major milestone by crossing ₹2,000 crore in commodity finance through its Non-Banking Financial Company (NBFC) arm. The achievement is the first of its kind in India’s agriculture-focused lending sector. Unlike conventional lending models, Arya.ag provides financing against actual grain stored across India’s rural and semi-urban regions. This innovative model is supported by cutting-edge technology and a decentralized storage network.

The firm has significantly scaled its operations, providing farmers with seamless access to credit and storage solutions. Last year, Arya.ag secured a $19.8 million debt facility guarantee from the U.S. International Development Finance Corporation (DFC). According to Anand Chandra, Co-founder of Arya.ag, the milestone establishes the company as the largest NBFC in India’s commodity collateral funding space. Farmers can receive credit in under 30 minutes using just KYC documentation. The company’s ability to maintain nearly zero NPAs underscores the success of its model. Beyond direct lending, Arya.ag has facilitated an additional ₹10,000 crore through partner banks, bringing total financing to ₹12,000 crore. The firm operates in 21 states, covering 60% of Indian districts, managing over four million metric tons of commodities. This milestone highlights Arya.ag’s transformative impact on the agricultural financing sector in India.

1. Arya.ag’s Business Model and Operations

1.1 How Arya.ag Works

Arya.ag provides an integrated platform that combines storage, financing, and trade solutions for farmers and agribusinesses. Unlike traditional financial institutions, Arya.ag directly links financing to stored commodities, reducing credit risks and improving access to funds. The platform leverages digital tools to monitor stored grains, ensuring transparency and security.

1.2 Revenue Model

Arya.ag generates revenue through interest on commodity-backed loans, transaction fees from its trading platform, and charges for warehouse management services. Its asset-light approach reduces operational costs, making it a highly scalable model.

1.3 Funding and Investments

In October 2023, Arya.ag secured a $19.8 million debt facility guarantee from the U.S. International Development Finance Corporation (DFC). The investment supports the company’s efforts to expand financial inclusion for smallholder farmers. Previous funding rounds have attracted investors such as Lightrock India, Quona Capital, and Omnivore.

1.4 Founders and Leadership

Founded by Anand Chandra, Prasanna Rao, and Chattanathan Devarajan, Arya.ag benefits from leadership with deep expertise in finance, agritech, and rural lending. Their vision is to eliminate inefficiencies in post-harvest agriculture.

2. Arya.ag’s NBFC Achieves Industry-Leading Milestone

2.1 Arya.ag Commodity Finance Surpasses ₹2,000 Crore

The firm’s NBFC arm has exceeded ₹2,000 crore in financing, making it India’s largest player in commodity-backed lending. This achievement doubles the scale of other market players.

2.2 Near Zero NPAs: A Unique Strength

Arya.ag’s ability to maintain nearly zero non-performing assets (NPAs) highlights the strength of its lending model. By financing against stored commodities, the company minimizes default risks.

2.3 Speed and Accessibility of Loans

Farmers can access credit within 30 minutes with just KYC documentation, eliminating bureaucratic delays. This rapid financing model ensures liquidity and enhances profitability for farmers.

2.4 Expanding Reach: Over ₹12,000 Crore Enabled

Beyond direct NBFC lending, Arya.ag has facilitated ₹10,000 crore in financing through partnerships with banks. This combined ₹12,000 crore financing underscores Arya.ag’s role as a financial enabler in agritech.

3. The Impact of Arya.ag on India’s Agricultural Sector

3.1 Solving Post-Harvest Liquidity Issues

Arya.ag’s platform allows farmers to store their produce securely while accessing immediate credit. This prevents distress sales and enhances profitability.

3.2 Digital Transformation in Rural Lending

With over 3,500 warehouses covering 60% of Indian districts, Arya.ag integrates digital tracking, AI-driven risk assessments, and automated loan approvals.

3.3 Enhancing Market Linkages

Arya.ag connects farmers directly with buyers, ensuring competitive pricing and reducing reliance on middlemen.

3.4 Supporting Smallholder Farmers

The firm has disbursed over $1.5 billion in loans to smallholder farmers and agribusinesses, promoting rural economic growth.

4. Learning for Startups and Entrepreneurs

4.1 Addressing Industry-Specific Challenges

Startups should identify pain points in their target sector and develop tailored solutions. Arya.ag’s focus on post-harvest inefficiencies helped it build a unique value proposition.

4.2 Leveraging Technology for Scalability

Automated risk assessments and digital tracking allowed Arya.ag to scale operations rapidly. Startups should embrace digital tools for efficiency.

4.3 Building Strong Financial Partnerships

Arya.ag’s collaborations with banks enabled it to facilitate ₹12,000 crore in financing. Strategic partnerships can accelerate growth and market penetration.

4.4 Ensuring Sustainable Business Practices

Maintaining near-zero NPAs demonstrates that a well-structured lending model can be both profitable and sustainable.

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