Vrutti and HSBC India Launch 'FPO Shakti' to Boost FPO Financing

By siliconindia | Friday, 05 December 2025, 03:28 Hrs

Vrutti and HSBC India launch a blended finance facility to ease credit access for FPOs.
The program supports early-growth FPOs with stage-based capital and technical assistance.
The initiative aims to build 100+ investment-ready, farmer-owned enterprises.

Vrutti, part of the Catalyst Platform, has partnered with HSBC India to launch FPO Shakti, a new financing facility designed to help Farmer Producer Organizations (FPOs) secure timely and appropriate capital. Friends of Women’s World Banking (FWWB) India will manage the facility. The initiative targets a major challenge in the rural economy, FPOs often struggle to grow because they fall outside traditional lending norms.

The FPO Shakti model uses a blended finance approach that brings together banks, catalytic capital providers, buyers, and technical partners under one structure. The facility will initially support 15 early-growth FPOs, with plans to scale to more than 100 organizations, helping them become bankable and investment-ready.

The model offers stage-appropriate financial tools such as revolving funds, guarantees, and revenue-linked finance. It also provides technical support through Business Support Organizations and introduces digital record-keeping to improve transparency and confidence among lenders. Each FPO will undergo a 24 month acceleration program covering governance, market access, business planning, and financial discipline, preparing them for long-term growth.

Aloka Majumdar, MD and Head of Sustainability at HSBC India, said the facility addresses a critical financing gap. “Many FPOs are too large for microcredit but considered too risky for mainstream banking. This structured model will strengthen their governance and unlock credit opportunities”, she said.

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Raghini Badhrinarayanan, CEO of Vrutti, added that the initiative moves FPO support from short-term projects to long-term institutional development. She emphasized the need for patient, stage-aligned capital that allows FPOs to operate like enterprises while staying rooted in farmer ownership.

The program aims to create resilient, farmer-led businesses by aligning capital with agricultural realities and offering a clear path into formal finance.