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Bridging the Credit Gap for Indian FPOs
5 Dec
Summary
- FPO Shakti facility aims to provide timely capital to Farmer Producer Organisations.
- Over two-thirds of India's 44,000 FPOs struggle to secure formal credit.
- Blended finance model combines capital, guarantees, and technical assistance.
A new initiative, FPO Shakti, has been launched by Vrutti, part of the Catalyst Platform, to address the critical capital needs of Farmer Producer Organisations (FPOs). Supported by HSBC India and managed by Friends of Women's World Banking (FWWB) India, this blended finance facility aims to provide timely and appropriate funding.
Despite India having over 44,000 registered FPOs, fewer than a third can access formal credit. Many FPOs stagnate due to collateral requirements and strict norms, creating a significant gap in financial access. FPO Shakti's model integrates financial institutions, catalytic capital providers, buyers, and technical assistance partners.
The facility will initially support 15 early-growth FPOs, with plans to expand to over 100. It combines revolving funds, guarantees, revenue-linked finance, and digital record-keeping, alongside tailored technical assistance over a structured 24-month period.
