Arya.ag is working with Finternet to connect grain deposits, electronic warehouse receipts and loan status on a dedicated Avalanche L1. The phased deployment is designed to give lenders a more reliable way to verify the commodities backing agricultural loans.
Nandan Nilekani, Infosys co-founder and non-executive chairman, today revealed the initiative during his Global Fintech Festival keynote.
Arya.ag, one of India’s largest agricultural warehousing companies, is consolidating its warehousing and lending systems through the project, bringing an existing agricultural finance business onto shared onchain infrastructure.
How It Works
Electronic warehouse receipts document commodities held in storage and can be used to support borrowing against those goods. By tokenizing these receipts, the platform will connect records of grain deposits with their collateralization and associated loan status in one place.
For lenders, the intended benefit is a clearer view of the collateral supporting a loan and its financing status. For agricultural borrowers, more reliable collateral verification could help lenders assess credit backed by stored grain.
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The Scale
- Arya.ag holds approximately $2 billion in agricultural commodities across its warehouse network.
- Its platform supports around ₹12,000 crore (~$1.3 billion) in loans annually.
- Arya Dhan, Arya’s NBFC, issues approximately $230 million in loans directly each year.
- Arya works with banks and other financial institutions to provide financing against commodities stored in its warehouses.
The commodity value and annual lending figures describe Arya.ag’s existing business. They do not represent the value of assets or loans already onchain.
Why It Matters
Farmers need cash after harvest, but may want to store their grain and sell it later. A warehouse receipt documents the stored crop and can help them borrow against its value.
To issue that loan, a lender needs to verify what grain is stored, whether it is already pledged as collateral and what debt is outstanding. When warehouse and lending records sit in separate systems, establishing that picture requires reconciliation.
The project applies tokenization to the records lenders use to issue credit against physical goods. Its significance lies in connecting stored commodities, collateral records and lending activity within a working agricultural business, giving regulated lenders a shared basis for verifying collateral as the deployment progresses.
Specifically, India has expanded access to banking, but agricultural credit remains a major gap:
- Farmers make up roughly 40% of India’s population, but only around 15% have access to credit.
- Around 75% of agricultural lending still comes through informal channels.
- Warehouse receipt financing allows farmers and agricultural businesses to borrow against commodities held in storage rather than selling immediately after harvest.
- India already has an electronic warehouse receipt system, but warehouse-backed lending remains fragmented and relatively underused, particularly among smaller farmers.
Why Tokenziation
The value of tokenization here is in connecting the physical commodity to the financial records around it.
The warehouse receipt can serve as a digital representation of the underlying stored goods, while the shared ledger can record how that collateral is being used in the financing process.
The intended result is a common record across the transaction rather than separate records held by the warehouse, lender and other participants.
What Changes
Today, warehousing and lending involve multiple systems and participants. The new platform is designed to connect those pieces:
- Commodity stored → electronic warehouse receipt → collateral pledged → financing → loan tracking
Tokenizing the warehouse receipts gives lenders a shared view of the underlying collateral and its financing status, while creating a common record across the transaction.
Arya.ag and Finternet will connect warehouse receipts, grain deposits, collateral commitments and loan status on an Avalanche L1. The intended result is a shared record that lenders can use to check the stored goods and their financing status.
Quantifying Impact
The initial focus is on improving the infrastructure behind warehouse-backed lending rather than claiming a specific impact on credit access.
More connected records could reduce reconciliation and make lending against stored crops easier to assess. Faster approvals, lower costs or greater access to credit are potential outcomes to be demonstrated as the system is deployed.
The model also depends on accurate verification of the physical commodities represented by the digital records.
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