Financing Options by
Kyra

Financing Options / Published January 15, 2017 by Pranav Jain

Pranav Jain

Financing Options

Kyra aims to make solar dryers accessible to all farmers and to see this become a reality we are proposing multiple financial options for the farmers. Farmers in rural India don’t have enough capital to self finance the solar dryers we aim to sell to them. The 8 kg model of the solar dryers will be sold a cost of INR 7985 ~ $120 (more details about the financials of the product will be shown in the upcoming blog posts).

The first and the most attractive option is a revenue sharing model under which Kyra proposes to have an EMI option for the payment of solar dryers. The farmers would have to pay INR 360 per month for 2 years under this scheme. Kyra will sustain an initial loss on this but will take a cut of the revenue generated by selling dried produce to cover the operational costs (transport/distribution + marketing + administration) and pass the rest to the farmers. The percentage of the cut will never be higher than the operational costs sustained, but at low volumes Kyra would ensure that enough revenue passes down to the farmers to cover their costs.

The second option is to form cooperative society of farmers with small land parcels who don’t have enough resources on their own. These cooperative societies can then pool their resources to buy solar dryers by either paying upfront or using the first option. Another option is to put them in touch with Microfinance Institutions (MFIs).

We are helped in our cause to the make these solar dryers affordable to the farmers by the grants and subsidies offered by the Government of India. Grants that we have identified to benefit the farmers are:
25% to 35% subsidy from KVIB (Khadi and Village Industries Board) on the total project cost.
Subsidy available from NABARD (National Bank for Agriculture and Rural Development) under post harvesting scheme.
50 % subsidy under the NADP (National Agricultural Development Programme). The minimum area required for setting up the solar drier is 400 sq ft.