Notes from June 23 call w sanjeev (Unlicensed) Gautam Mandewalker Ashu Sikri (Unlicensed)

From Bharosa co-founders Aditya Trivedi and Pranjal Dubey

• Got a bit more clarity on the model.

  • Bharosa identifies and helps individual farmers execute on value-addition business opportunities like ghee production and daal processing

  • Bharosa’s role is to 1) facilitate access to capital 2) drive sales of farmer production 3) provide an operating playbook / business plan which the farmer executes.

  • On capital, Bharosa identifies a bank / NBFC interested in lending to farmers. Benefit to the bank is that Bharosa originates the loan, and de-risks it by helping the farmer sell

  • On sales, Bharosa sells the individual farmers' products under their own Bharosa brand. They are selling through ONDC and doing things to build consumer trust like QR codes so customers have transparency to the producing farmers. Selling retail and B2B (targeting govt procurement). Bharosa takes a cut of the sales it facilitates

  • On playbook / biz plan, Bharosa is identifying the equipment (which farmers purchase using the funds Bharosa facilitates through their financing partners), providing production guidance, branded packaging materials, etc. Basically, farmers execute the Bharosa playbook.

  • We didn’t get into specific numbers but it sounds like they have some success with this model for ghee and daal production at pilot scale in MP and a few other places. Apparently they have a list of ~15 products like oilseeds, ketchup and grains where there is potential for differentiation on the roadmap

  • Bharosa is supporting FPOs but prefers to engage with individual farmers in the model detailed above

• Strong perspective on when to support collective vs individual farmer assets. Basically, whenever real-estate and land is involved (eg, storage facility, drying facility), a collective asset make sense. For anything else, individual makes sense. Aditya’s perspective is that profit sharing among a collective becomes really tricky bc high performing farmers don’t want to be weighed down by free-riders.

• Feel that FPOs need more exposure to investments that actually make sense, suggested peer exposure and learning is critical here otherwise decision making is emotional and directed towards things with low ROI. Need to think about good mechanisms to avoid this in funding platform.

• Partnering with a group called Vikalp which produces relatively low cost farm implements that reduce drudgery esp for women (eg scythe).

• Next steps. Bharosa to share a brief on an FPO in MP who wants to invest in storage facilities, which could be a pilot opportunity. It’s mostly women members and their commodities include wheat, soy, onion, garlic. Also, Bharosa is keen for us to be a capital provider in their model and/or invest in Bharosa (not sure that makes sense but we can learn more).

Notes from June 2 call w Vineet Singh Gautam Mandewalker

• Focus geographies: MP - main, 16 districts, 400+ villages; Chhattisgarh; UP; Uttarakhand

• Work with farmers and in some cases FPOs on:

  • Decentralized processing/ production - provide the equipment, know how, packaging, labels etc which farmers use to create SKUs and bharosa sells the product for example Ghee or pulses

  • Provisioning equipments - they have partnered with IITK mech department and get some innovative products like crop cutter which requires female farmers to sit and require lot of effort and replace it with a different equipment that reduces effort as it requires, they have similar other equipments manufacturers that they connect farmers to from Kanpur

  • financing - increasing loan applications for banks and in the process collecting data about farmers which can further help process loan applications

• SBI Kisan Credit Card pilot:

  • SBI gave them 20 days to prove in three different regions, one in MP, one in UP and one in Karnataka

  • Target was to get loan applications for the SBI for Kisaan credit card

  • Loan size: 1.8 lakhs to 2.3 lakhs per farmer

  • Loan purpose: buying input or small equipment for the season

  • They got 250 loan applications as opposed to SBI themselves getting 1

  • pain point solved for SBI:

    • Govt has given them 16k crore to give farmers loan 

    • If they don't give the money is gone in some other fund

    • SBI has people on ground and processes in place but just can't get it done

  • Their methodology:

    • Got field staff doing KYC for amazon pay in that region who know the place, who know the farmers who speak in that language

    • Make an app that collects 94 data points required

    • Give the data of farm to satsure who creates a profile of 15 years - what was grown and soil health etc

  • Revenue model:

    • they get 1 % of loan amount (1800 to 2300)

    • their cost is 300-400 including data collection per farmer

  • Next stage:

    • SBI most likely to give them orders

    • opening up for other banks

• Synergies with DG:

  • FPO financing:

    • They can connect with an FPO that has 1500 farmers

    • FPO farmers grow four different commodities in different seasons:

      • wheat

      • pulses

      • garlic

      • onion

    • pulses growers need daal mill, garlic and onion needs dryer, quality etc

    • they will facilitate giving money to the FPO member farmers who will pool money to get daal mill or dryer etc for their respective requirement

    • he is wary of giving money to FPO - he says FPOs are going to become and are already political organizations - the money will go into office building where the chief of FPO will get his son an office as a status symbol

    • he thinks he can provide necessary carrot of buying daal at good price if they setup daal mill 

    • their workforce can get on ground and ask farmers to enter data in their app

    • they can integrate our SDK to get consent and share data to other orgs as well

    • he liked AgNext use case and would want to pilot that with FPO for garlic/ onion

    • the other option he suggested are exporters in that area that they know

  • FarmStack:

    • he said he is technical and wants to read the resources on farmstack 

    • happy to install farmstack on their server to exchange data

    • sees clear value

  • Video dissemination:

    • Very positive - he wants to integrate in the app or

    • also get a company MAAS from Jharkhand (Mobile Agri something something...) who have mobile vans for advisory and touched 250k farmers