Mastercard on Thursday (20th April 2023) announced its collaboration with M1xchange to offer a digital invoice discounting solution to farmers, farmer producer organisations (FPOs), and agri-MSMEs through Farm Pass, its agritech platform.
* Along with enabling access to credit and working capital, the solution will allow farmers and FPOs to directly connect with buyers and negotiate prices for their produce. Farm Pass is part of Mastercard’s broader Community Pass platform.
* As part of the collaboration, M1xchange, an RBI-approved facilitator for discounting and sale of receivables to banks and non-banking financial companies (NBFCs), will bring on board its network of agri-businesses and lenders.
* Sundeep Mohindru, CEO, M1xchange, said in a statement, “The network of financiers on M1xchange TReDS will enhance liquidity flow for buyers and sellers on the Farm Pass platform. TReDS offers a unique proposition that discounts invoices raised by FPOs for their end customers based on their credit profile.
* This makes FPO business scalable as their dependence on credit for working capital financing is removed through invoice discounting. All FPOs registered on Farm Pass will get access to a network of more than 55 banks and NBFCs via M1xchange.”
* Owing to the delays and follow-ups involved in directly engaging with buyers, famers and agri- MSMEs often sell their products to middlemen to avail instant payments. The FPOs also struggle with access to working capital, which prevents them from procuring effectively from farmers.
* By enabling credit via invoice discounting, the Mastercard-M1xchange solution aims to equip these FPOs with working capital to purchase goods from farmers and sell them to buyers at the best price with instant payment. This will help start a self-sustaining cycle for the FPOs, resulting in self-sufficiency over the medium to long term..
Source : India Times