Small farmers may now avail of seed money from financial technology or fintech startups.
Fintech startups in Asia are now offering support to smallholder farmers in accessing potential markets, said Christian Lauron, SGV Financial Services Consulting Partner and Government & Public Sector Leader.
Fintech also provides access to affordable credit, capital for agricultural equipment and other financial services, Lauron said at an online forum on the potential of fintech in advancing agricultural developmentorganized by the SyCip Gorres Velayo & Co. (SGV) and the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA).
The forum discussed fintech’s role for farmers to access financial services and supply chain more efficiently.
Fintech uses internet technology to deliver financial services, including investments, loans, startup financing, bit coins and the now common use of smartphones for mobile banking.
Finance is a driver of growth in agriculture but improving farmers’ access to financial instruments is also key to their adoption of better farm technologies for greater productivity, speakers agreed.
Fintech can link farmers to secure financial services outside the traditional banking system.
Agricultural transformation requires farmers to shift from traditional agricultural payment systems to using available digital money services to reduce their financial risks, Lauron said.
A number of fintech financial services are now available to farmers, he pointed out.
Among the startups to watch out for, according to Lauron, are farMart and Jai Kisan, both in India; Crowde and TaniHub, both in Indonesia; Impact Terra in Myanmar; and Cropital in the Philippines.
Cropital, for example, provides farmers access to scalable and sustainable farming. Its development programs are supported by institutions in the United States, Netherlands, Malaysia and the Philippines.
FinTech solutions are not limited to financial services, said Christian Edmund Chua, SGV Financial Services Consulting senior director.
Fintech solutions can also be critical to creating a sustainable and transparent supply chain, he said.
In particular, blockchain technology allows digitization of processes and operations along the value chain which can improve supply chain efficiency, decrease operation costs and increase sales and revenues, Chua said.
(Blockchain technology stores information such as transactions inside ‘’blocks’’. As one block fills up, information is entered into a new block. All blocks are chained in chronological order.)
Chua said blockchain promotes transparency as it enables the agriculture sector to establish a shared environment or database between all stakeholders.
“If done well, fintech could be key to increasing agricultural productivity because of its huge potential for financial inclusion by making financial services and products accessible even to the marginalized farmers and farming families,” said Dr. Glenn B. Gregorio, SEARCA Director.
“Ultimately, there is need to look into options to build the financial systems of the country to improve the access of farmers and enterprises to capital and financial services and to explore the use of modern financial technologies to improve cost efficiency across the supply chain,” said Dr. Rico C. Ancog, an Associate Professor at the University of the Philippines Los Baños.
One such option is the ongoing development of a digital agricultural platform that SEARCA and its partner APPGeese are piloting with vegetables farmers in Nagcarlan and Liliw, Laguna, and in Dolores, Quezon, said Ancog who leads SEARCA’s Emerging Innovation for Growth program.