Aquaconnect launches financial risk management service “AquaCRED”

Aquaculture startup “Aquaconnect” launches a full-stack technological intervention “AquaCRED”. This aims to bring a formal financial network to be small and medium aquaculture farmers by working on a risk assessment-based financing strategy. AquaCRED initiative facilitates BFSI players to extend their services across the value chain and thus ensure easy formal credit availability to the farmers.

India is one of the largest aquaculture producers globally that produces about US$ 17 billion worth of fishes and shrimp production. More than 90% of the produce comes from small or medium-sized farmers. However, access to formal finance remains a challenge as most of them lack access to formal credit to purchase key inputs at critical junctures in the aquaculture cycle.

According to the press statement, AquaCRED enables this financial inclusion by combining ‘eyes in the sky’ (secondary data from satellite remote sensing solutions) and ‘boots on the ground’ (primary data from pond’s samples) through machine learning. It also brings transparency and predictability to the entire process, thereby lowering risks and solving associated problems for the BFSI segment transforming the industry. AquaCRED, Aquaconnect enables the Aquaculture farmers to access formal finance and avail credits to buy farm inputs and other farming requirements.

“In my view, the biggest impediment for the growth of the aquaculture sector is the lack of data and the absence of formal finance. While it is a multi-billion dollar ecosystem, Indian banks, financial service providers and insurers are staying away from this opportunity due to the lack of data and credit risk assessment framework. AquaCRED offers risk management solutions to BFSI stakeholders for enabling underwriting and asset monitoring capabilities through GIS remote sensing and machine learning technology stack. At the farmer front, credible data profiles create a huge opportunity for fish and shrimp farmers to access formal finance with low interest and reduce the dependency on informal lenders”, says Rajamanohar Somasundaram, founder and chief executive officer of Aquaconnect.

A lack of data-driven risk-mitigation strategy makes it almost impossible for BFSI institutions to extend their products to various stakeholders within the value chain, especially farmers who bear the full risk. Limited access to formal credit leads to a higher dependency on informal lenders such as feed & farm-care product retailers and traders. Eventually, in comparison to formal credit-based interest rates, they pay very high annualized interest, thereby reducing farm income for the farmers.

According to Amit Salunkhe, vice president – Sales, Aquaconnect, “Our goal at AquaConnect is to turn data into information & information into actionable insights for Banks, Financial intuitions & Insurance companies, thereby empowering them to invest in the growth of aquaculture farmers and eventually within the industry itself. AquaCRED is going to be the single most important key which shall successfully bridge the gap between BFSI institutions and Fish & Shrimp Farmers.”