Bridging the Credit Gap for India’s Farmers
In the heart of India’s robust agricultural landscape lie millions of farmers who form the backbone of the nation’s economy. These dedicated individuals ensure food security and contribute significantly to the country’s GDP. However, despite their critical role, many farmers face persistent challenges in accessing timely and adequate credit. Seasonal farming demands quick access to funds for purchasing seeds, fertilizers, and other essential inputs, yet the traditional banking processes often involve cumbersome paperwork, multiple branch visits, and prolonged turnaround times of two to four weeks. Such delays not only hinder their ability to seize crucial farming opportunities but also force many to rely on informal and often exploitative lending sources. Recognizing the need to address these issues, the Reserve Bank of India (RBI) decided to revive their flagship Kisan Credit Card (KCC) Program by issuing a challenge to banks across the country to develop an innovative solution under KCC that could drastically reduce the time taken for farmers to avail credit.
Building the 5-Minute KCC Solution: A Technological Triumph
Responding to the RBI’s challenge, Federal Bank and New Street Technologies, under the guidance of the Reserve Bank Innovation Hub (RBIH) and in collaboration with the Tamil Nadu eGovernance Agency (TNeGA), embarked on achieving the hitherto unprecedented task of delivering a loan to a farmer under KCC within 5 minutes -a feat that many other banks and technology companies were unable to achieve.
At the core of the 5-minute KCC solution is MiFiX, New Street’s proprietary blockchain powered middleware platform. MiFiX integrates a bank’s core banking system with external third parties and their system infrastructure and applications. MiFiX leverages Hyper Ledger for the blockchain protocol and REST Application Programming Interface (API) layer to both transmit and receive information from the end user facing front end applications, a Go Language centred Chain Code lifecycle management system and a NOSQL based Couch data base.
This design enables real time encrypted data transfer between external data lakes and internal smart contracts thereby empowering a field officer of the bank or a third party service provider to authenticate input data even from remote regions including UIDAI based eKYC information directly via the bank’s server.
Following customer authentication, MiFiX which integrates multiple credit bureaus, can automatically and non-sequentially check the credit worthiness of the end customer using smart contracts.
The power of blockchain is further unleashed while evaluating the land records of the farmer in real time by extracting details from the original Government land records database and authenticating them. MiFiX’s built-in Scale of Finance and Credit Rule Engine microservice modules then compute the loan parameters such as amount, tenor, interest rate, fees, repayment schedules, etc., and prepares the requisite documentation digitally, which is then e-signed by the farmer on location.
In parallel, the bank can access MiFiX to underwrite the loan digitally and disburse the loan amount to the customer’s choice of bank account via NEFT, IMPS, or internal transfer.
Uniqueness of the 5-Minute KCC Solution
The 5-Minute KCC solution stands unparalleled in the realm of banking, being the only platform capable of disbursing an unsecured loan from remote parts of the country while securing the authenticity of the borrower and his repayment capability within a mere five minutes.
MiFiX is infinitely scalable across multiple partners or business correspondents and can cater to any type of financial services from loans to account services, insurance, and investments.
The Impact
Since its inception, the 5-Minute KCC solution has made significant strides in transforming Agri loans. As on December 2024, over 33,000 farmers have been financed to the extent of ₹110 crores via MiFiX.
This initiative has also played a pivotal role in enhancing financial inclusion, ensuring that farmers receive the necessary funds promptly to support their agricultural activities and sustain their livelihoods. The remarkable success and innovative approach of this solution were recognized by the then RBI Governor, Shaktikanta Das, who lauded the achievement during his speech at the Global Fintech Festival 2022. Additionally, the solution was showcased at Federal Bank’s Founder’s Day, highlighting the initiative’s impact and excellence. These recognitions underscore the solution’s effectiveness and its vital contribution to empowering India’s farmer community.
The impactful achievement of the 5-Minute KCC not only demonstrates the platform’s prowess in providing timely Agri loans but also sets a precedent for future innovations in banking & finance.
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About New Street Tech
New Street Tech’s proprietary technology, MiFiX, is the world’s first blockchain-powered middleware for the BFSI sector that seamlessly integrates with existing systems, enabling zero-friction partnerships, minimal resource usage, faster time-to-market, and effortless scalability to profitability.
MiFiX’s low-code, capital-light framework and microservices architecture allow BFSI organizations to deploy financial products efficiently without disrupting legacy systems. Already transforming the industry, MiFiX powers a variety of products, including JLG Loans, Agri Loans, and insurance offerings for top banks and companies in India.
Serving over 500,000 modest income customers across India, MiFiX is driving financial inclusion through operational excellence. Additionally, MiFiX has received several renowned industry accolades from leading organizations. To learn more, visit www.newstreettech.com.
