The fintech sector has been fast growing and has contributed to the economy in different ways. One of the areas where they have contributed is agriculture. Fintech firms have helped farmers in different ways. In fact, there are many fintech firms that exclusively focus on farming.
Fintechs and farming
1) Financing support
Modern farming calls for investment in equipment and technology. Most farmers would need financing for this. Fintechs are now allowing farmers to get financing easily without having to look for middlemen. Fintechs have made it easy for farmers to get loans. In many countries, there are now online marketplaces where farmers can get credit and loans. Apart from financing, there are fintechs who offer planning tools as well as resource management tools.
2) Farming insurance
Farming involves risks. Diseases and vagaries of weather can affect the crops. Climate change has made farming riskier. Farms that have animals can suffer losses in case animals get a disease or die. Similarly, equipment failure is another risk farmers face. This risk can be managed through farming insurance. Fintechs are allows farmers to insure crops, animals, and equipment at affordable prices. Referred to as insurtech, these firms are allowing farmers to get the best benefits of insurance. According to FAO, 90% of farms in the world are classified as small-scale. Such farms that found it difficult to get insurance can now get it thanks to fintech.
3) Enhanced Payment systems
Farmers experience issues related to payment, especially in rural areas. Thanks to fintech, they now have different options available for payment. Fintech companies offer various payments systems and payment models for farmers. The use of digital payments has ensured convenience and also brought in transparency. Payment costs have also been reduced by fintechs. It has led to better financial inclusion of farmers.
4) Better access to the market
In many countries, farmers face issues related to market access. They depend on intermediaries and end up losing a lot of money in the process. The growth of fintechs have made it easier for farmers to access the market. Farmers can now directly sell their products in the market. Farmers can now use their smartphones to access marketplace making it easier for them. It is now possible for farmers to directly sell to buyers and earn more money.
Fintech has made a significant impact on farming. The lives of farmers are now much better thanks to the easy availability of financing, insurance, and better access to the market. Fintech has proved to be a boon for smaller farmers.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
