How a Dharavi-based housemaid inspired rural financial start-up Jai Kisan 

A Dharavi-based housemaid, Rasheeda, has been the inspiration for rural-focussed digital financial services startup Jai Kisan, which is eying to increase the number of farmers working with it to one million by the end of the current fiscal.

Says its co-founder Arjun Ahluwalia, “I found our housemaid buying a mobile phone from a showroom nearby and a private financial services firm financing her. That made us think.”

In the case of Rasheeda, she does not depend on the mobile for her income. “But what about a farmer who wants to buy fertilizer? There is not a single lender at the points of sale to fund growers. That’s where we thought we would be able to unshackle the potential of the rural economy,” the company’s co-founder told businessline in an online interview.

One stop solution

Incorporated in the last quarter of 2017, Jai Kisan provides a one-stop solution for rural businesses through its Bharat Khata digital app in 11 languages. “Last year, we had 8.12 lakh farmers who worked with us in some or the other capacity. Hopefully, we will touch the one-million mark this year,” Ahluwalia said.

Jai Kisan, which fills the massive credit gap in rural areas dominated by moneylenders who collect exorbitant interest, works with 280 companies, including multinationals, that are involved in agriculture, poultry and dairy to help farmers. The start-up offers financial support to farmers to buy crop inputs and gets back its money once they sell their produce after the harvest.

The company, which draws its inspiration from the Green Revolution,  began its journey working with points of sale merchants who provide crop inputs to farmers. Jai Kisan offers loans to farmers ranging from 12 per cent to 24 per cent, which Ahluwalia says is almost similar to the 9-18 per cent that banks charge. 

Insurance pilot

It has also begun to provide saving accounts to farmers who do have any saving accounts or have accounts in banks that do not provide net banking facilities, said Ahluwalia.  

Jai Kisan has begun offering insurance products in a small way and is working on a pilot project, he said. 

On winning the trust of farmers, the company’s co-founder said: “Going directly to the farmer is extremely hard and complex because of the trust issue. We realised clearly that you cannot look at disrupting the middleman in the value chain.  Rather you need to look at providing a value proposition to their position,” he said.  

Before launching Jai Kisan, Alhuwalia and his co-founder Adriel Maniego lived in a Maharashtra village, Dharabad, for eight to nine months to understand what they should do and how they should go about it. 

Blessing in disguise

Once the company began to work with companies apart from the point of sale merchants, farmers began to trust Jai Kisan more. “Working closely with large companies has helped build the trust factor,” Ahluwalia said. 

On the other hand, digitisation in rural India has proved to be a blessing in a disguise. Initially, there were apprehensions over digitalisation but now the people have understood that it is the way to survive and probably help to perform better.         

According to Rahul Chandra, Managing Director, Arkam Ventures, which has invested in Jai Kisan to the tune of ₹50 crore in 2020, his venture capital firm found the start-up had an interesting horizontal financing idea cutting across regions, crops and represented one of the largest horizontal opportunities in agriculture. 

Arkam invested soon after Covid lockdown and the investment was based on “whether the agri value chain will be disrupted or it will remain stable”.  Things have remained stable and the company has grown in strength, he said. 

Post-harvest funding

Jai Kisan, which is present in almost all states in the South and West barring Kerala and in Madhya Pradesh and Rajasthan in the North, works with brands too in rural areas apart from banking correspondents, who are partners at the points of sale to finance the needy.  

“Post-harvest, we help farmers by paying the money they are supposed to get from the buyer, say, for example, a dairy firm. These payments take a week or more. We pay them upfront and help meet their needs,” Ahluwalia said. 

To a question, he said digital banking has helped growers to pay back loans on time. “Another reason is that they find more value in paying back the loan on time,” the co-founder said. 

Stating that farmers had no bad intentions on repaying loans, Ahluwalia said defaults earlier were because they did not know what they were supposed to do, how and when.   

Investors of the firm

Jai Kisan has raised its $90 million funds strategically. Nab Ventures, a subsidiary of Nabard, is one of the investors, while the UK Government’s British International Investments is another. “We also have Mirae Assets, Bloom Ventures and a significant number of high networth individuals,” Ahluwalia said. 

Besides Japanese venture capital funds,- GMO Ventures and DG Ventures have also funded the company. Jai Kisan is “operationally profitable” and will soon break even.

Chandra said more farmers are joining marketplaces and there is an increasing dependence on digital advisories. “We are seeing positive changes happening for progressive farmers.  Of course, their overall revenues are increasing as a result of adoption of newer digital practice,” he said.

Stating that adoption of digitisation is more visible and stronger after Covid, he said  it keeps investors interested and “hopeful of the path ahead”.   

Arkam has also invested in Jumbo Tails, which is into commodity trading. At least 50 per cent of its components are agri commodities and Chandra said the venture fund was looking at a promising future for it.