In the last 5 years, the number of companies that have developed products and services on financial technologies has increased rapidly. The common purpose of these companies is to design new technologies that aim to improve and automate of financial services and bring them together with the peoples. Hundreds of financial technology companies that are very successful in this field are still living.

These companies are generally referred to as “Fintech” companies, which is an abbreviation for “Financial Technology” in English. In addition, we can see different company labels such as “InsuranceTech” (insurance related technologies) and/or “RegTech” (technologies for regulation and compliance).

Of course, the first targets of fintech companies in terms of product and service design have been the retail banking market. The commercial banking market quickly followed. However, another group of customers, which at first glance does not appear in either the retail or commercial banking markets, is just being discovered by fintech companies. This customer group is farmers and agricultural production companies operating in all scales and different production branches.

Agri-Fintechs come from From Asia!

The Asian continent is home to two countries, namely China and India, that host more than half of the farmers worldwide. A total of 350 million farmers live in these two countries. In countries with such a crowded farmer population, it is naturally extremely difficult to finance agricultural production and for farmers to access financing resources. For example, agricultural credit cooperatives have 40 thousand branches in China.

In India, on the other hand, there are more than 7 thousand bank branches serving only farmers. Of course, a geography with such large agricultural organizations offers extremely attractive opportunities for fintech companies. Last year, companies developing agricultural financing technologies were established in India, Singapore and Indonesia and these companies received significant investments. These companies are now called “Agri-Fintech”.

What is the Difference of Agri-Fintechs?

Due to the unique characteristics of agricultural production, agricultural financing resources also have unique features. For example, loans with annual payments, equipment purchase loans and animal purchase loans, many types of loans that are unheard of in daily life are specially designed and offered for use in this sector.

In addition, farmers’ cash flow cycles are not similar to those of business companies or salaried employees. Agricultural expertise is required to design a financial instrument or technology for the agricultural sector. Thus, Agri-Fintech companies become companies that have a multi-disciplinary structure, in other words, understand agricultural production and can shape their financing technologies according to this sector.


About İsmail Uğural

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