THE Philippine government-hosted Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) said financial technology or fintech can link farmers with financial services outside the traditional banking system.
SEARCA Director Glenn Gregorio said since finance is a driver of growth in the agriculture sector, there is a need to improve farmers’ access to financial instruments that is also key to their adoption of better farm technologies for greater productivity.
“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,” he said.
Gregorio said SEARCA in collaboration with SyCip Gorres Velayo & Co. (SGV) has explored in a webinar the potential of FinTech in advancing agricultural development in the Philippines.
According to SGV, agricultural transformation requires farmers to shift from traditional agricultural payment systems to available digital money services to reduce financial risks.
Christian Lauron, leader of SGV Financial Services Consulting Partner and Government and Public Sector, noted that several agri fintech startups in Asia are offering support to smallholder farmers in accessing potential markets, affordable credit, capital for agricultural equipment, and other financial services.
“To maximize these, there is a need to increase the awareness and knowledge of farmers on these kinds of platform,” Lauron said adding that among the fintech startups to watch include farMart and Jai Kisan, both in India; Crowde and TaniHub, both in Indonesia; Impact Terra in Myanmar; and Cropital in the Philippines.
SGV also explained that fintech solutions are not limited to financial services and that they can also be critical to creating a sustainable and transparent supply chain.
Christian Edmund Chua, senior director for SGV Financial Services Consulting, said blockchain technology, in particular, allows the digitization of processes and operations along the value chain that can improve supply chain efficiency, decrease operation costs, and increase sales and revenues.
“Blockchain promotes transparency as it enables the agriculture sector to establish a shared environment or database between all stakeholders,” Chua added.
Rico Ancog, University of the Philippines Los Baños associate professor and UP scientist who leads SEARCA’s Emerging Innovation for Growth program, said there is ultimately a need to look into options to build the financial systems of the country.
“This is 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,” he said.
One such option is the ongoing development of a digital agricultural platform that SEARCA and its partner APPGeese Inc. are piloting with vegetable farmers in the municipalities of Nagcarlan and Liliw in Laguna and Dolores, Quezon, Ancog added.