Dvara E-Registry’s Analytics Solutions for Credit Underwriting and Monitoring Agricultural Loans

Agriculture is identified as one of the top beneficiaries in the priority sector lending mandate for banks by the Reserve Bank of India. According to this mandate, banks are required to encourage the growth of such sectors with adequate and timely credit. In Budget 2021, the Indian government raised the farm loan target to Rs 16.5 lakh crore for fiscal year 2022, compared to the Rs 15-lakh-crore target in the preceding year. However, banks face immense challenges in meeting their requirement of disbursing loans to small and marginalised farmers due to high perceived risk of default, non-digitisation of farmlands leading to increased cost of verification and unavailable credit histories.

Dvara E-Registry’s Solution for Credit Underwriting: To help banks create a profitable agricultural portfolio, Dvara E-Registry offers a tailor-made analytics solution called KhetScore that helps banks make informed, data-backed credit underwriting decisions that ensures crop loans are issued to productive farmers (who may not get loans because of credit history), increasing the size and quality of the bank’s agricultural loan portfolio.

KhetScore is a farm analytics package that enables multidimensional assessment of land parcel productivity derived from independent data including land parcel specific satellite and weather data. Dvara E-Registry provides the analytics by leveraging multiple proprietary AI algorithms that use many years of historical data. The KhetScore Analytics Package offers season-wise data for various parameters that help banks assess the productivity and risks of a farmer’s agricultural activity. This helps make informed underwriting decisions.

The parameters considered are:

  • Geo Referenced Plot Details to verify the existence and location of the plot
  • Verification of geo referenced plot with government survey numbers in select states of India where plots have been digitised
  • Land use classification to ensure that the plot is being used for agriculture using AI algorithms
  • Historical land parcel level drought and flood occurrence
  • Season wise assessment of plot productivity (sowing frequency), crop health, plant moisture, soil moisture, nutrition and mechanical damage
  • A historical weather and temperature range analysis for the plot.
  • An overall KhetScore that integrates this multi-dimensional analysis into a single score that ranges from 0 to 100 which can be used as an underwriting criterion. You can read more about how we generate the KhetScore here.

Using the KhetScore analytics package, a bank has clear independent alternate assessments of a farmer’s capacity to repay a loan and the appropriate size of the loan. This supplements traditional credit analysis and is especially important in the absence of credit histories for new to credit farmers.

Gateway to New to Credit Farmers

With the use of KhetScore, financial institutions can include “New to Credit” (NTC) farmers to their agricultural loan portfolio.  This segment is a huge market – In its 2019 report, the Reserve Bank’s Internal Working Group to Review Agricultural Credit estimated that despite numerous existing initiatives, at most, only 40 per cent of India’s small and marginal farmers are covered by formal credit.   This means they have no credit history to show, and no formal documentation. So, it becomes harder for lenders to assess the likelihood of default. This translates to the fact that around 60% of India’s small and marginal farmers are relying on informal credit and paying high interest rates due to the lack of access and lack of a good credit score to be eligible for a formal agricultural loan from a bank.

Dvara E-Registry’s Solution for Crop Monitoring:

To complement the pre sanction analytics, Dvara E-Registry also provides real time monitoring analytics that allow banks to track crop loans through the crop season on multiple crucial parameters like growth stage, exact sowing date and expected harvest date. These features help banks recall loans if evidence shows that farmer has not cultivated or plan for repayment based on the expected harvest date.  KhetScore now also provides scores for bio physical parameters like crop health, nutrition, plant moisture and soil moisture. This data will help the farmer rectify problem areas before it is too late. When required, Dvara also provides customised advice for a given plot. Using crop monitoring technologies like KhetScoreNow will help the banks save substantial costs which otherwise would have been diverted towards field personnel travelling to each farmland for periodical crop monitoring. Dvara E-Registry also offers API integrations for KhetScore and KhetScore Now that enable banks to access these analytics through their own credit underwriting and monitoring platform.

Recently, Dvara E-Registry partnered with agri value chain providers and financial institutions to provide loans to small and marginal farmers using KhetScore and KhetScore Now in various states of India. Read about it here and here.

Other Service by Dvara E-Registry

With a goal to make agricultural loans profitable for all stakeholders, Dvara E-Registry not only offers analytics services but also business correspondent services to banks for agricultural lending in facilitating end – to – end lending process. To support farmers and farmer collectives (FPOs), Dvara E-Registry, through the Doordrishti integrated platform provides crop advisory, market linkages and other productivity enabling services that help the farmer succeed.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Dvara E-Registry’s Machine Learning Model Allows Observations Through Cloud Cover.

One of the key services offered by Dvara E-Registry is analysing existing agricultural data and turning it into valuable insights in the form of crop advisory for farmers and crop monitoring systems to aid efficient agricultural loans and insurance claim settlements. We do this by using several indices including the Normalized Difference Vegetation Index (NDVI), a widely used index to estimate agricultural activity and monitoring land-use changes. With these indices, land around the world can be studied, making it useful for both targeted field analysis, as well as continental or global-scale vegetation monitoring. Looking at these indices alongside other data streams such as weather data can give further insight into patterns of drought, floods that affect vegetation.

These indices use data from multispectral satellites which offer a wealth of information. However, a key limitation of such satellites is that they do not work when cloud cover is present. Alternate satellites like microwave radar satellites can sense through cloud cover, however the data is not as rich and the data is not easy to interpret.

To mitigate this limitation, Dvara E-Registry has developed a model using synthetic-aperture radar (SAR) bands that are cloud independent. The model is a machine learning based approach that re-constructs the NDVI time-series upon recovery of cloud pixel from SAR data even during cloud cover. This model has been possible through training our existing machine learning model over time series inputs along with other proprietary data.

Through the development of this model, Dvara E-Registry will now be able to provide analytics irrespective of weather conditions. This model will be used for our product KhetScore, a farm score that assesses the performance of land plots from the standpoint of agricultural activity on a near real-time basis. KhetScore is a tech-enabled product that can be used by financial institutions and insurance providers to get real-time data, monitor existing crops and implement innovative methods like loan tranching and underwrite loans to farmers. Products like KhetScore are particularly useful when credit scores are not available, as in the case of new-to-credit farmers.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Designing Credit Products for Farmers- Insights from a Field Study in Maharashtra

By Aparajita Singh & Tarun Katoch, Dvara E-Registry[i]

Executive summary

In our quest to understand the financial needs of our partner FPOs’ farmers, Dvara E-Registry conducted a household survey with 175 farmers spread across four districts Buldhana, Pune, Ahmednagar, and Chandrapur in Maharashtra. The survey was divided into four parts and investigated different aspects of their agricultural and financial lives spanning across credit, insurance, saving and farmers’ outlook towards paying for agri-services which have till now been available free of cost provided that the paid services will be better suited to their requirements. We release these findings as a four-part blog series.

In this blog post, we discuss our findings on credit. Our conversations across the four FPOs provide evidence that farmers have credit appetite as well as willingness to pay if the market provides the right credit products allied with suitable agricultural services. Read on to know more.

Rural households have diverse sources of livelihoods. While most households depend on agriculture or allied sectors for their source of income; small shops, skilled professions, dairy, and labour comprise a significant portion of the population. A common thread across rural sources of livelihoods is their informal nature and consequentially the absence of monthly cash flows. The cash flows are often irregular, and the variations may range from being daily to being seasonal in nature. Most rural households depend on multiple sources of income for basic needs like food, shelter and access to essential services like health and education.

At Dvara E-Registry, a major component of our work is to understand the financial lives of the farmers we serve, in order to customize products according to their requirements. Agriculture remains one of the riskiest and most important business in modern times. Moreover, the concerned businesspersons or farmers in this case, do not have enough capacity to absorb these risks or tools to mitigate them in the event of an unforeseen occurrence. Yet, most financial products are not designed to cater to their needs, which brings us to some very pressing questions:

  • Why aren’t there enough financial products to cater to such a large borrower base?
  • What are the factors that contribute to the perceived riskiness of the borrower as well as the business?

We conducted a survey with 175 agricultural households across four districts from our partner FPOs to understand their overview and usage patterns of common financial tools like credit, insurance and savings.

Particularly for agriculture, we understand that riskiness of the business is contributed to three main factors[ii]

  • Time lag between investments and returns
  • Volatility of commodity markets
  • Underdeveloped financial markets

Understanding financial tools for rural and low-income households is important as, in the absence of these mechanisms, households mitigate risks by resorting to substandard mechanisms. For example, cultivating crops which are high-volume low return (cereals) as opposed to low volume high return crops (horticultural crops, cash crops). While diversification of assets for generating higher incomes and mitigating risks is encouraged, we note that low-income households use this technique to constantly protect themselves from falling into poverty or to fulfil repayment requirements of perennial short-term loans taken to counter liquidity crunches. This diversification in occupations can be seen where some investment in terms of time, money and labour is spread across farms, crops, dairy, and paid labour to ensure at least one source of income is available.

Through this survey, we aim to understand how a suitable credit product can help farmers break these cycles to elevate to higher-income scenarios and whether farmers are open to such a product.

A brief snapshot of the demographic characteristics of the respondents are as follows-

  1. 72% of the households had four-six members in the household, followed by 21% which had less than three members, and 7% of the households had seven to ten members in the households
  2. 83% of the households had one to two earning members, and 16% had three to four earning members.
  3. For 90% of the households, agriculture was the primary source of income while there were rare instances of earnings via own business, dairy, Kirana stores, hair saloon, atta chakki (grain grinding machine), and so on.

Upon enquiring if the household was borrowing, more than 90% of the farmers were borrowing to meet their financial requirements. While more than half depended on KCC loans, the rest relied on gold loans, MFIs and other sources.

We learnt that more than half the respondents who were availing KCC loans felt that their credit requirements were not met.

For additional requirements, farmers usually rely on loans from local farmers groups.

For most of the farmers, the duration of these loans is more than nine months. Still, we observe that a little more than a third of these farmers settle for short term loans which are less than nine months. Short term loans may be used for meeting urgent liquidity constraints as opposed to investments for better returns.

Majority of the farmers, depending on where they are borrowing from, are either paying in between 5%-10% or 20%-25% (rate of interest per annum) on loans. Generally, Kisan Credit Card (KCC) charges up to 5%, farmer groups charge in between 5%-10%, banks charge up to 15%, and NBFC MFIs charge above 15%. There are also instances of money lenders who charge as high as 60%.

Though farmers do not cite borrowing from agri-input dealers, more than 50% require credit for purchasing agri-inputs.

Most farmers in this region repay post-harvest even if they borrow from the dealer. This is contrary to the popular belief that they are bound to sell to the dealer for repaying the loan. Even among those who sell the produce to the dealer, they report receiving market prices for their produce.

Takeaways and product implications for lenders

We see that rural agricultural households have credit appetite and willingness to repay. There is a need to design credit products in such a way that farmers can invest these in productive agricultural activities which will offer better returns. Designing credit services for farmers which are well-suited for their financial and business needs will help them not only to repay the loans on time but also increase farmer incomes.

These credit products will add additional value when coupled with adequate agricultural know-how, access to relevant information about government schemes, agri-services, and price awareness across marketing platforms. Better farm productivity and price realization for farm produce ensure the ability to repay loans at market-determined interest rates. Since knowledge and access of such services are restricted to big farmers, some FPOs have now started channelling these same services to small and marginal farmers through digital platforms like Doordrishti by Dvara E-Registry. This helps de-risk these loans as not only do platforms like Doordrishti offer services to farmers that ensure they take the most profitable agricultural decisions but also help farmers monitor these loans.

[i] The authors thank Aastha Saxena for her assistance on the graphs. The authors also thank Nawale Navnath, Naresh Gaikwad, Vilas Mate and Ganesh Chormale on their assistance in conducting the survey.

[ii] Aggarwal, S. (2013). Commodity price risk and financing. In B. Ananth & A. Shah (Eds.), Financial engineering for low-income households (pp 172-180). New Delhi: SAGE India.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Proceedings of AgClinic Panel Discussion on Post-harvest Marketing- Commodity Exchanges of the Future (Episode 1)

By Aparajita Singh, Dvara E-Registry and Abhijit Goswami, ThinkAg

The 5 historic agri-announcements are out now after decades of advocacy but what now, who will take this forward and how? To answer these questions, ThinkAg and Dvara Trust have curated a 3-episode series on Post Harvest Marketing. The first episode decodes Commodity Exchanges of the Future with a diverse and learned panel consisting of Mr. S.K. Mohanty (whole time member, SEBI), Mr. Vijay Kumar V (MD & CEO, NCDEX), Mr. Sanjay Kaul (Chairman, NCML), Mr. Jatin Singh (Founder & MD, Skymet), and Ms. Chetna Sinha (Founder & President, Mann Deshi Foundation).

The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) increases the breadth of physical agri-market places which were restricted to APMCs till date. The Farmers (Empowerment & Protection) Agreement on Price Assurance and Farm Services provides for a farming agreement prior to production to help farmers sell directly to sponsors.  The Essential Commodities (Amendment) will bring ample trade opportunities for manufacturers, processors and MNCs. They will also play an essential role in pumping additional liquidity in the market and buffering price fluctuations. The one lakh crore Agriculture Infrastructure Fund will unlock opportunities for trade and act as an enabler for warehouse receipt financing. At the heart of these are the Operational Guidelines for the Formation and Promotion of 10,000 FPOs which will give farmers an equal footing in a well-functioning market. The detailed research brief presented at the panel discussion summarizing these reforms, the landscape of Indian agri-markets and role of ag-techs in commodity exchanges in the post-reform era can be found here.

Removing the monopoly of APMC mandis, restrictions on storage, better infrastructure and norms dictating contract farming can bring a revolution in the agriculture sector. These reforms serve as a fertile ground for offering new and innovative models of operation to the erstwhile deprived and heavily regulated agricultural sector in India.

Simultaneously, we are cognizant that this is but the first step to ensuring a well-functioning agricultural market where all players are compensated fairly. The weakest link in this chain continues to be the farmer. It is only through empowering grassroot organizations like FPOs and ensuring they are indeed farmer owned can we bring about an agricultural revolution. Post-harvest marketing is pivotal to triggering these reforms and ensuring farmers get access to the best prices. While we have made significant progress on tackling production risk through crop insurance, price risk continues to haunt the agricultural sector.

Commodity exchanges and futures markets play an indispensable role in mitigating price risk for farmers. They also help inform better sowing decisions, promote access to markets, reduce transaction costs, tap into alternative sources of finance and prevent distress selling. The current status of agri-marketing in India is largely through traditional spot markets that are unorganized in nature and equipped with limited infrastructure. There are various costs of carrying out marketing activities from price discovery and transportation to searching for buyers and selling which we refer to as transaction costs.  Over the last few years, there is a welcome shift from “farming to maximize yield” to “farming to maximize profit”.

As Mr. Mohanty (whole time member, SEBI) narrates, on the regulatory front, SEBI has taken several progressive steps to bring the commodity derivatives market at par with the equity market. To name a few, an exclusive clearing corporation was set up with the same set of innovation principles, counter party guarantee and risk management. SEBI had to overcome certain regulatory and legislative obstacles in order to launch ‘Option in Goods’. This is a giant step for farmers towards being able to factor in cost, tackle price fluctuations and claim profit where due. With the launch of AGRIDEX, India’s first return based agricultural futures index, Futures and Options can be traded both for agri & non-agri commodities.

In its effort to incentivize FPOs to trade on the platform and scale these efforts, SEBI has waived off the regulatory and turnover fee for FPOs. As a pilot, SEBI has advised NCDEX to retain the amount in a separate fund and subsidize the FPOs’ cost of transaction which includes transportation cost, grading cost and assaying cost. To further reduce the transaction costs incurred by FPOs in going through a broker for trading, SEBI wants to offer FPOs a limited broker-membership by bringing in a suitable regulatory amendment. Additionally, SEBI will enable FPOs to directly trade on the Exchange platform by simplifying the KYC norms.

Mr.Vijay Kumar V (MD & CEO, NCDEX), emphasises on the role of hedging price risk instead of speculative trading in the market. Internationally, most of the institutions in the sector have survived over the years as they have constantly hedged their risks. He also feels that NBFCs have been better touch points for farmers as compared to banks. Offering appropriate incentives structures in the form of discounted interest rates to institutions that lend or consumers who hedge would help deepen markets.

Mr.Sanjay Kaul (Chairman, NCML) envisions that the next few years will see a lot of collaboration between market players and policy makers. In a country like India with diversity in cropping patterns and commodities, the idea of having one centralized player like e-NAM may not be able to achieve the envisioned scale. Private innovations in marketing platforms cutting across commodities and geographies need to co-exist. 

Mr. Jatin Singh (Founder & MD, Skymet) rightly notes that there is a major shift in narrative from states delivering goods to now these goods and services being delivered through private players. There is a need to provide services that are adaptable across different regions and demographics. A lot of these models are assisted to adapt to the limited financial literacy and awareness among the customer base.

Ms.Chetna Sinha (Founder & President, Mann Deshi Foundation) emphasises the responsibility of the industry in ensuring that the services and products being built are easy to use and accessible for farmers. If the industry wants farmers to get connected to the modern ecosystem, then the onus lies on the former to design suitable products. Currently, the operational issues while availing services like warehouse receipt financing in the form of getting lab test reports, assaying, and grading are too high for farmers who require immediate liquidity. If farmers see benefit, they will be willing to invest time and money in the commodity derivatives market, warehousing services, and paying for other services that add value to their business.

The highlight of the show was SEBI’s Innovation Sandbox which gives players working in the commodity derivatives market access to market data to test their innovations. ThinkAg and Dvara Trust plan to pilot a few concrete ideas on this platform. The proposed ideas include having an ERP equivalent interface for FPOs, price insurance (in case of horticultural crops), and weather indexed insurance. You can access the video of the proceedings here. To hear more about the roadmap ahead and opportunities to explore here, do tune in to the second episode on 6th October.


Agriculture Census Division, the Department of Agriculture, Cooperation and Farmers Welfare, Government of India (2019). Agriculture Census 2015-16

Chatterjee, T., Raghuanthan, R., & Gulati, A. (2019). Linking farmers to futures market in India. Working Paper 383, Indian Council for Research on International Economic Relations

Government of India (2020, February 8). Cabinet approves Central Sector Scheme of financing facility under Agriculture Infrastructure Fund. [Press Release]

Deana, S. (2019, September 3). Agtech Landscape: Tracking 1600+ Startups Innovating on the Farm and in the Supply Chain. Forbes.

Directorate of Economics &Statistics, Agricultural Statistics Division of the Department of Agriculture, Cooperation and Farmers Welfare, Government of India (2019). Agricultural Statistics At A Glance 2018.

Directorate of Economics &Statistics, Agricultural Statistics Division of the Department of Agriculture, Cooperation and Farmers Welfare, Government of India (2019, February 28). Second Advance Estimates of Production of Foodgrains for 2018-19.

Gulati, A. (2020, August 17th). Getting Agri-Markets Right. The Indian Express

Ministry of Agriculture & Farmer Welfare, Government of India (2020, February 4). Linking Farmers with Markets [Press Release]

Ministry of Finance, Government of India (2015). A National Market for Agricultural Commodities- Some Issues and the Way Forward.  In Economic Survey 2014-15.

Nirmal, R. (2020, January 21). How many farmers are there in India? Government has no clue

Overview of Commodity Futures Exchanges and It’s Governance in India.

Pandey, K. (2018, August 28th). Poor post-harvest storage, transportation facilities to cost farmers dearly. Down To Earth.

P. Pingali et al. (2019), Transforming Food Systems for a Rising India, Palgrave Studies in Agricultural Economics and Food Policy,

Singh, A. and Shah, S. (2019, June 20). The Road Ahead for Farmer Producer Organisations in India. Dvara Research Blog.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Doordrishti Communication Engine – Connecting Farmers to the Agri-Value Chain


KhetScore – A Comprehensive Farm Index


Crop Yield Estimation Using Alternative Technologies

Case Studies

Leveraging Technology to Enhance Credit and Insurance Delivery to Small and Marginal Farmers in Odisha