Fintech in Agriculture
The evolution of the fintech industry has witnessed dramatic changes in the last couple of years. The majority of the people across the globe have come to terms with fintech’s growing contribution and share in the global economy. Mobile payments through digital platforms, online KYC (Know Your Customer), easy cross-border transactions, quick loans, and credits have become the new normal in our daily lives now. The fintech industry’s efficiency and practicality are now pervading several other sectors by creating integrated solutions together, for example, online food ordering is now massively supplemented by fintech across the globe.
Today’s article will discuss fintech’s role in agriculture, retail, and consumer electronics.
Fintech and Agriculture
The agricultural sector is an essential but underdeveloped part of the global economy. While developed nations have already explored and employed mechanized solutions to increase productivity and decrease labor dependency, developing countries are yet to reach that position. Agriculture is an indispensable part of all economies, as it is an essential sector for life sustenance.
However, with the rise in prices due to inflation and the ever-increasing global demands for food due to population growth, the agricultural sector has faced many serious challenges. These challenges have given rise to many opportunities for streamlining and improving the productivity and efficiency of this sector.
Fintech’s role in the agricultural sector has helped improve the sector’s plight substantially, by digitizing several aspects and transferring more control to the key participants of the industry, the farmers.
Some of the ways in which fintech has resolved issues in the agricultural industry are:
- Credit & Insurance
Financing is one of the key players in the agricultural setup. The majority of farmers in the world rely on credit, microfinance, and subsidies from financial institutions and governments. The farming sector is laden with risks stemming from weather changes, which makes significant investments incongruous with the investors and credit providers.
By digitizing such a process through fintech, both financial institutions and farmers have gained more control and relief than before. Online banking, easy insurance policies specifically for agricultural equipment and harvest, simple onboarding and eKYC processes, platforms to connect farmers directly with consumers, etc., have started a revolution that could bring immense changes to the agricultural industry.
- Asset Registries and Receipts
Along with credit and microfinancing, there is a growing requirement for mechanization of the processes involved in the production and harvest of crops and produce. Countless new and innovative machinery and equipment are reaching the global market to supplement the processes involved in farming. Fintech has been instrumental in providing simpler methods for asset registries and receiving warehouse receipts, making the entire system more secure for farmers.
- Financial Literacy
Several fintech platforms target increasing the financial literacy of farmers and other participants. By doing so, farmers would be in a better position to make more informed decisions, which would help make the overall system more efficient.
- Financial Inclusion
In developing countries such as India, Indonesia, the Phillippines, Cambodia, etc., a large population remains unbanked or underbanked. Most of this population resides in rural regions away from city amenities, like private banking. Fintech, in the past few years, has percolated to these regions to provide basic banking and payment facilities, which otherwise could only be carried out through government offices and banks. Such facilities have made it easier for small farmers to be a part of the social system, avail of subsidies, apply for and receive credit and financing, and conduct other activities which would eventually empower them.
- Food Wastage
Food wastage remains one of the biggest problems of the modern world. Fintech and digitization have also helped tackle food wastage and storage issues globally. By creating platforms that advise and share information about food production, transport cost, and the market, and applications that connect farmers with consumers directly, food wastage has been reduced substantially, enabling a more efficient system.
To Conclude
Fintech has actively contributed to creating integrated solutions with different industries. In the present age, fintech is not solely about payments and online banking but much more. We are yet to realize its enormous potential as technological developments favor creativity and innovation, making way for more opportunities perpetually. Such advances in the global setup have proven to massively transform traditional functions, lifestyles, and more through their power.
With fintech integrating with the farming sector, many issues have found resolutions, and countless more problems are tackled constantly with such shared solutions. The agricultural industry is undergoing an independent transformation with digital machinery, less labor-intensive, and more mechanized equipment and processes, making way for more fintech opportunities, in the process. Fintech has the power to supplement enormous leaps, and that is exactly, what the farming sector needs.
