GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided two partial guarantees to HSBC India for an INR 2.5 billion (c. USD 30 million) loan facility extended by HSBC India to Arya.ag India’s leading grain commerce platform.
The proceeds of the transaction will be used to provide post-harvest liquidity to farmers, farmer producing organisations (FPOs) and small agri-enterprises, to bring them under the formal banking channel, which, in turn will help the farmers to unlock greater value for their crops.
This is GuarantCo’s first transaction in the agricultural sector in India, with a strong focus on financial inclusion and climate resilience. The sector has a significant presence in India, employing c.60% of the market’s workforce and contributing c.20% of its GDP. However, the full economic impact of the agriculture sector is currently unrealised, with over half of farming households financially excluded from formal credit sources.
Arya.ag supports the financial inclusion of farmers by offering farmgate-level storage, instant finance against commodity, and market linkages for seamless commerce. This allows farmers, FPOs and agri-enterprises to avoid distress sales immediately post-harvest when prices are at their lowest, by storing commodities until off-season when prices appreciate to often generate 20-30 percent higher returns.
GuarantCo’s Impact team assessed the project as aligning with the UN Sustainable Development Goals: SDG 2 Zero Hunger (Double the productivity and incomes of small-scale food producers) and
SDG 15 Life on Land (Protect, restore and promote sustainable use of terrestrial ecosystems, halt and reverse land degradation and halt biodiversity loss).
GuarantCo will provide partial credit guarantees for two separate loan facilities from HSBC India to Arya.ag’s integrated commerce platform Aryatech, and its fintech arm Aryadhan. Arya has also been supported by a Technical Assistance grant from the PIDG Trust.
Nishant Kumar, Managing Director, Asia Investments at GuarantCo and Head of Coverage – Asia at PIDG said: “We are delighted to join hands with HSBC India for the first time to support Arya in developing the marketplace infrastructure for India’s crucial agricultural sector. Arya is a unique and innovative company that has the power to unlock the potential of underserved farmers by expanding storage, finance and commerce markets, to ultimately increase their revenues.”
“The transaction is expected to provide added market transformation value as replication of Arya’s integrated value chain would enhance the resilience of the domestic post-harvest market. GuarantCo, through the Private Infrastructure Development Group, continues to seek out opportunities to increase economic impact and empower lower-income communities to deliver against the UN’s Sustainable Development Goals in alignment with the PIDG 2030 strategy.”
Sonali Shahpurwala, MD and Head- Inclusive Banking Unit, HSBC India, said, “We are pleased to collaborate with GuarantCo and Arya on this significant transaction that supports the agriculture sector, a primary driver for India’s economy. This loan underscores our commitment to provide financial solutions that empower businesses like Arya to enhance infrastructure, drive sustainable growth and create a lasting impact.”
Anand Chandra, Co-Founder and COO of Arya.ag, said, “Partnering with GuarantCo and HSBC India expands our ability to connect farmers, FPOs, and agri-enterprises to vital resources while driving trust and transparency through technology. GuarantCo’s support underscores the transformative power of our integrated model that drives secure storage, accessible financing, and transparent market linkages beyond traditional reach shaping a more efficient and inclusive agricultural ecosystem.”
