Vrutti & HSBC Launch FPO Shakti, Financing Facility for FPOs

By: WE Staff | Friday, 5 December 2025

• Vrutti has launched FPO Shakti, a new financing facility for Farmer-Producer Organisations (FPOs)
• The initiative is supported by HSBC India and FWWB India
• It aims to fix the funding gap that stops many FPOs from expanding

Vrutti, from the Catalyst Platform, has introduced FPO Shakti-an innovative financing facility to enable FPOs to obtain appropriate capital at the right time in their journey.

HSBC India and Friends of Women's World Banking (FWWB) India are supporting the programme as Facility Manager. This will contribute to solving the acute financing gap that, unless addressed, inhibits the growth of a large number of FPOs beyond early development.

Although India has more than 44,000 registered FPOs, less than a third of these have access to formal credit. Most struggle for growth, as collateral-based loans and strict eligibility criteria restrict financing avenues.

This has created a "missing middle," where FPOs are unable to access timely capital, thus weakening rural value chains and limiting income opportunities for smallholder farmers.

The blended finance model under the FPO Shakti Facility brings together financial institutions, catalytic capital providers, buyers, and technical assistance partners to take up the challenge.

This will support 15 early-growth FPOs in the first phase, with planned scaling to over 100 organisations. The idea is to build a pipeline of financially viable and investment-ready, farmer-owned enterprises.

The model combines various financing instruments, including revolving funds, guarantees, and revenue-linked finance with technical assistance from Business Support Organisations. Additionally, it introduces digital recording systems to enhance transparency and lender confidence.

Each FPO will undergo a 24-month structured program covering governance, business planning, financial discipline, and market linkages that will make them both investment-ready and market-ready.

Aloka Majumdar, MD & Head of Sustainability at HSBC India said that many FPOs are unable to access finance as they remain "too large for micro-credit and too risky for mainstream finance."

She emphasized that a structured approach toward capacity building and governance would unlock credit access and help sustainable growth.

According to Raghini Badhrinarayanan, CEO of Vrutti, the facility represents a shift from support for short-term projects to long-term strengthening of institutions.

She emphasized the need for patient capital and supporting systems that enable FPOs to function as enterprises, while ownership remains in the community.

This initiative is a part of a wider turn in rural finance toward capital models that better match agricultural realities, capacity-building needs, and risk profiles.

In combining diagnostics, technical support, customized capital instruments, digital tools, and pathways to formal finance, the program will contribute to strengthening farmer-owned enterprises and supporting more resilient rural economies.