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Impact of Financial Services on the Growth of Farmer Producer Organizations (FPOs) in South India

Year: 2025

Type: article

Abstract: 2. Abstract Farmer Producer Organizations (FPOs) play a vital role in strengthening the collective capacity of small and marginal farmers by enhancing access to credit, markets, and inputs. In South India, where farm holdings are highly fragmented, financial services remain central to the viability of these institutions. Despite policy support from NABARD, SFAC, and other agencies, challenges such as financial illiteracy, collateral constraints, documentation barriers, and high-cost borrowing often restrict FPO growth. Drawing on field-level insights and stakeholder interactions, this study highlights the dual realities of financial access: while some FPOs face debt stress and exclusion from formal credit, others have leveraged finance to establish collection centres, diversify activities, engage in bulk sales, and expand into new markets. By presenting both constraints and success cases, this paper examines how financial services shape FPO sustainability in South India and suggests directions for policy and institutional strengthening. Keywords: Farmer Producer Organizations (FPOs), Financial Services, Access to Credit, Rural Development, Collective Marketing, Agricultural Finance, Institutional Support, Financial Inclusion, Farmer Collectives

Source: INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT

DOI: 10.55041/ijsrem52917

Authors: Santosh Santosh, Meghana Meghana

Language: English

Topic: Microfinance and Financial Inclusion

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Decent work and economic growth, Zero hunger

Open Access status: bronze

OpenAlex ID: W4415134820

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