Vrutti Partners with HSBC India to Launch 'FPO Shakti', a Financing Facility to Strengthen Farmer Producer Organisations

BusinessWire India

New Delhi [India], December 4: Vrutti, part of the Catalyst Platform, announced the launch of the FPO Shakti, a Financing Facility. It is a blended, stage-based financing model designed to help Farmer-Producer Organisations (FPOs) access the right capital at the right time. Supported by HSBC India and Friends of Women's World Banking (FWWB) India as the Facility Manager, the initiative aims to bridge the longstanding financing gap that stops FPOs from growing beyond early incubation.

India has more than 44,000 registered FPOs, yet fewer than one-third can access formal credit. Many stall after early growth because collateral-based loans and strict eligibility requirements lock them out of the financial system. The problem here is that the right capital never arrives at the right time, creating the "missing middle" that weakens rural value chains and caps smallholder income growth.

The FPO Financing Facility responds to this systemic challenge through a blended finance approach that brings financial institutions, catalytic capital providers, buyers, and technical assistance partners into one operational model. It will support an initial cohort of 15 early-growth FPOs, with plans to scale to 100+ organisations, building a strong pipeline of bankable and investable farmer-owned enterprises.

The model combines stage-appropriate capital instruments such as revolving funds, guarantees, and revenue-linked finance with technical assistance delivered through Business Support Organisations. It includes digital record-keeping systems that enhance transparency and lender confidence, and a readiness framework focused on governance, business planning, market linkages, and supply chain discipline. Each FPO will go through a 24-month structured acceleration journey covering governance, market systems, financial discipline, and digital enablement. The result is a pathway for FPOs to become investment-ready and market-ready, supported by capital that understands the seasonality, risks, and realities of agriculture rather than judging them against unrelated commercial norms.

Speaking on the initiative, Aloka Majumdar, MD and Head of Sustainability, HSBC India, said, "FPOs play a crucial role in improving the socio-economic well-being of farmers. However, a vast majority of FPOs face the challenge of accessing credit as they are either too large for micro-credit or too risky for mainstream finance. A structured intervention that builds capacity of FPOs, strengthens governance and enhances business capability is the need of the hour. The facility will unlock a pipeline of investment-ready FPOs by reducing credit barriers, strengthening governance, and positioning them for sustainable market participation."

Speaking on the launch, Raghini Badhrinarayanan, CEO, Vrutti, said, "This Facility marks a shift from short-term project support to long-term institutional strengthening. FPOs need patient capital and the right scaffolding. With this model, we are creating the pathway for FPOs to function like enterprises while staying rooted in community ownership and farmer value."

The initiative signals a shift toward a rural financing approach where capital is aligned to stage, capacity, and risk; where finance builds strength; and where farmers move from being producers to becoming shareholders in enterprise growth. The operational framework integrates readiness diagnostics, BSO-led technical assistance, customised capital tools, digital systems for real-time visibility, and clear graduation pathways into formal finance, laying the groundwork for an era of resilient, farmer-owned enterprises.

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