About GRAM- Promoter and Facilitator

GRAM (Gram Abhyudaya Mandal), is a Non-Governmental Organisation operating in Telangana for the past 35 years. GRAM has facilitated the formation of over 3800 MACS (Mutually Aided Co-operative Societies) with a member base of 50,000 women, 625 village-level sanghas, 19 Mandal-level Intideepam Producers MACS (Mutually Aided Co-operative Societies) and one federation.

INTIDEEPAM- Formation and concept

Indur Intideepam Producers’ MACS Federation Limited (INTIDEEPAM) was formed and registered in the year 2002 under the Andhra Pradesh MACS Act, 1995 comprising 19 MACS,with a member base of 50,000 women agriculturists.

Save-buy-sell (SBS) Model

For optimised results, GRAM has shared its model of save-buy-sell (SBS) to INTIDEEPAM, which implied saving money in the groups, utilising said money to buy inputs and sell the output by leveraging their market linkages. The market price for the product is paid upfront to women producers at the village level, and the produce is directly delivered to the buyers, bypassing local markets. This concept has enabled women producers to realise better market value for their produce. INTIDEEPAM procures soya, paddy, and maize from its members and supplies it to soy oil producers through their procurement centres. Inputs are procured at a discounted rate and supplied to the members at market rates. The differential amount is paid towards the member’s share capital. Internal demands for groceries are also aggregated and supplied through INTIDEEPAM, which provides an opportunity to realise higher margins in the sale price.

Challenges Faced

The challenge that the company faced was related to uninterrupted inputs supply and connecting to larger markets. They also needed constant financial support to enhance the potential of their SBS model.

Financial Intermediation by Samunnati

Since inception, GRAM, the promoter of INTIDEEPAM, availed credit from rural and nationalised banks for livelihood and other purposes of its members.

GRAM approached Samunnati on INTIDEEPAM’s behalf to raise input procurement funding for its members. Samunnati, in line with its genetic code, assessed the case by giving due weightage to the social and trade capital of the members and the buyer-seller relationships that existed in the trade transactions, the vintage, turnover and repayment track record. Samunnati, after due appraisals, initially sanctioned a short-term loan to GRAM to procure agricultural inputs. With the list of members availing the facility, the loan funds were disbursed directly to the input suppliers to ensure proper end-use. This also benefited the farmer members as quality inputs at competitive prices were delivered to their door-step, due to bulk purchase of inputs.

Post-harvest, the produce was handed over to INTIDEEPAM who identified buyers and also ensured the sale proceeds were routed through an ESCROW account managed by Samunnati. On receipt of funds, Samunnati deducted the amounts due from the farmers and remitted the remaining sales proceeds to the farmers’ accounts. This ensured timely repayment of loans for Samunnati and receipt of sale proceeds to the farmers.

Encouraged by the success of the GRAM financing model, Samunnati has since replicated the solutions with FPOs based in Madhya Pradesh, Gujarat and Karnataka. We hope to replicate the same across other geographies as well.