Reaffirming Maharashtra’s position as India’s most mature ecosystem for farmer-owned enterprises, Axis Bank announced a strengthened credit-support architecture for Farmer Producer Organisations (FPOs), anchored in risk-mitigation, financial discipline, and structured growth pathways. Speaking at a regional industry forum, Vinod Gangrude, Vice President, Axis Bank underscored that Maharashtra now leads the country with over 14,000 registered FPOs, creating an unrivalled foundation for scale in aggregation, processing, and market integration.

Vinod Gangrude described Sahyadri Farms, India’s largest farmer-owned cooperative, as the state’s most compelling blueprint for what robust governance, capital access, and value-chain discipline can achieve. The bank emphasised that Sahyadri’s success demonstrates the institutional readiness required for thousands of emerging FPOs to transition from small-scale trading units into sophisticated agri-enterprises capable of delivering stable, market-linked farmer incomes.

A key highlight of Axis Bank’s presentation was NAsanrakshan, a credit-guarantee–backed working capital program designed exclusively for FPOs. The initiative provides loans ranging from Rs 10.01 lakh to Rs 200 lakh, with a tenure of two years, and is tailored for organisations with a minimum business vintage of two years. Bank officials explained that the credit guarantee mechanism is intended to reduce the perceived risk associated with lending to collective institutions, enabling more FPOs to access working capital without onerous collateral requirements. “Liquidity remains the lifeblood of agricultural enterprises,” Gangrude noted. “By de-risking credit and ensuring working capital flow, we are empowering FPOs to procure on time, process on time, and sell on time—three factors that directly determine farmer profitability.”

The bank also underscored the importance of leveraging central schemes to reduce financing costs. Under the Agriculture Infrastructure Fund (AIF), eligible FPOs can access an interest subvention of three percent on loans up to Rs 2 crore, significantly lowering the cost of capital for investments in processing, storage, grading, infrastructure, or supply-chain expansion. According to Axis Bank, the convergence of NAsanrakshan and AIF has created a favourable financing environment that allows well-governed FPOs to scale operations without being constrained by prohibitively expensive debt.

To ensure financial discipline and institutional strength, Axis Bank reiterated that all FPOs must meet the eligibility norms defined by NABARD’s FPO Rating Tool, scoring above the 65 percent threshold. The bank outlined that NABARD’s framework evaluates three pillars of organisational health: financial performance (20 percent), processes and systems (30 percent), and business and operations (20 percent). Axis Bank executives highlighted that the emphasis on systems and processes is especially crucial as FPOs move from trading to processing, where regulatory compliance, quality assurance, and inventory management require far more rigorous governance structures.

The bank emphasized that this rating-driven approach encourages FPOs not only to maintain clean books of accounts and operational transparency but also to adopt market-facing business plans, diversify product portfolios, and invest in professional management. These elements, according to Axis Bank, are essential for ensuring that the state’s expanding FPO network can evolve into a robust agro-industrial cluster capable of competing in domestic and global markets.

Axis Bank concluded by noting that Maharashtra’s unique combination of a dense FPO network, strong institutional backing, expanding agro-processing demand, and supportive policy frameworks positions it to become the epicentre of India’s next wave of rural enterprise growth. With credit guarantees, interest subvention, and data-driven rating tools now forming the backbone of FPO financing, the bank said the focus must shift to operational excellence and value-chain integration—factors that will ultimately determine whether Maharashtra’s 14,000 FPOs can replicate Sahyadri Farms’ transformative model at scale.

— Suchetana Choudhury (suchetana.choudhuri@agrospectrumindia.com)