African farmers may soon reap the rewards of Blockchain Technology
Africa’s economy is largely dependent on its agricultural offerings. However, many farmers are not able to benefit from the advancements in their industry due to a lack of financing.
This cash deficiency, which results in a distinct lack of technology, has drastically slowed down the development of these farms. Most farmers still rely on only rainfall to sustain their crops as they cannot afford to take proactive measures, such as installing irrigation systems.
The majority of these farmers live in rural areas and therefore many do not have access to the traditional bank systems that could assist them. In addition, even though the importance of agriculture is clear to see, government assistance is not.
However, blockchain technology could offer a solution.
London-based mineral investor, African Potash Ltd, will be teaming up with Global Markets Exchange Group International’s (GMEX), FinComEco, with an aim to create blockchain-based platforms to improve the lives of these farmers.
“The biggest impediment to small-holder farmers in Sub-Saharan Africa is access to finance,” said GMEX’s founder and CEO, Hirander Misra.
The partnership hopes to change this through their innovative supply-to-demand initiative. African Potash Ltd, which will be changing their name to Block Commodities Ltd, stated that these decentralized platforms will connect potential traders with smaller farmers in a bit to develop competitive pricing, as well as to potentially increase productivity and efficiency.
This is essential in changing the current picture of farming in Africa. Even though the continent offers a tropical climate and fertile lands, it is becoming increasingly, and worryingly, reliant on importing agricultural items.
Farmers using the platform will also be able obtain financing through micro-loans at a rate of 12%. This is nearly half of what these farmers are currently expected to pay if they do manage to successfully navigate traditional banking processes. These funds could be used for the purchase of high-yielding seed, effective pesticides and fertilizers.
Blockchain technology will also assist with supply chain aspects such as recording financial and transactional information.
Misra expressed his hope that this new venture will equalize the financial situation in the region. This in turn will increase local adoption. The success of this initiative will also improve the quality of life for millions of farmers on the continent.
Both Société Générale and Deutsche Börse had both previously owned stakes in GMEX. This was before its exchange and post-trade technology arm was sold in 2016.