Inside-Outside: Mechanisms for Managing Credit Sales and Receivables at a FPC | JOHAR Project

Dhakshini Koel Farmer Producer Company Limited (DKFPCL) is one of the reputed FPCs located in Lohardaga, Jharkhand. It is promoted by Jharkhand State Livelihood Promotional Society (JSLPS), under JOHAR Project, a World Bank funded Project. The FPC has presence in 4 blocks of the district i.e., Kuru, Kisko, Senha and Bhandra. DKFPCL has a base of more than 2,000 women farmers. The FPC has major engagement in High-Value Agriculture (HVA) crops like chili, tomato etc. along with livestock, Fishery, and Non-Timber Forest Produce (NTFP).

A distinct characteristic of the FPC is that the Board of Directors (BoDs) come from different age groups ranging from 20 to 65 years. These enthusiasts work together by bringing a distinct blend of experience and energy for a common goal. The average BoDs participation in the meeting is around 80%. The BoDs have undergone training on various components from Governance to Financial Management with Ananya under the JOHAR project.

The diverse portfolio of the DKFPCL has made it difficult for the FPC to maintain a proper record of the cash flows. With little experience in accounts and bookkeeping, the accounts department faces the problem of managing the debtors. This resulted in higher working capital requirements, higher costs, increased probability of non-realization of debtors and sub-optimal profitability. Moreover, the BoDs of the DKFPCL are not aware of proper mechanisms to analyze financial statements and hence, fail to keep track of critical areas like debtors management. On understanding the issue, it was also discovered that the debtors are willing to pay the amount but there is no formal collection practice established by the FPC for regular collection. A system on better financial statement analysis, collection practice and accounts management was identified as a challenge.

The team realized that mere establishing a mechanism and spoon-feeding the same to the FPC is not a sustainable solution. Hence, the team adopted a simple TPLA (Train, Practice, Learn and Act) strategy to solve the problem. Read how Ananya's team devised and implemented TPLA strategy for solving the challenge at DKFPCL here: Case Study


JOHAR (Jharkhand Opportunities for Harnessing Rural Growth) is a project implemented in 68 blocks across 17 districts of Jharkhand, India. The development objective of the project is to enhance and diversify household income in select farm and non‐farm sectors for targeted beneficiaries in rural areas. Ananya is engaged as one of the Technical Support Agencies for enhancing creditworthiness of the Producer Groups (PGs) and Producer Companies (PCs) by way of imparting trainings, streamlining book keeping, helping adherence to regulatory compliance & supporting financial reporting & analysis.

The case study is authored by Avi Jain, Nagendra Rajawat and Neeraj Kumar.