Brazilian farmers to gain access to affordable credit through Blockchain and nfts

Translated synopsis from CoinTelegraph Brazil: Agricultores brasileiros têm acesso ao crédito facilitado através de blockchain e NFTs (cointelegraph.com.br)

This was the compelling headline in Brazil’s leading crypto daily featuring our CEO, Fakhul Miah, talking about our inaugural Credit4Good programme in Brazil. The programme addresses what Fakhul describes as the ‘credit paradox’: huge segments of the population denied affordable credit, not because of any financial shortcomings, but simply due to the absence of relevant data supporting their case.

In the piece, Fakhul highlights the issue with respect to Brazilian farmers, who continue to face punitive interest rate charges as a result, and the steps that CeDA’s Credit4Good progamme is taking to address.

“In practice, credit models currently being applied to the sector fail to consider the current and potential value of agricultural assets, against which farmers are securing their loans. Such assets would include, not only land and equipment, but the quality of the same, the cultivation practices employed by each farmer, as well as his/her agricultural and commercial track record,” says Fakhul.

Through a series of partnerships CreDA is accessing and analysing geo-tagged aerial land surveys, data on farm size, crop conditions, irrigation, and yield potentials in addition to farmers’ financial information, then modelled with the company’s proprietary credit risk algorithms that assess assets and payment behaviour both in the traditional system and on Blockchain. The latter provides verification and ensures the integrity and transparency of the data, as well as its availability; farmers can effectively consult and manage their credit score in real time. The Blockchain ledger system also enables environmental practices to be tracked in real time and, for instance, farmers following sustainable methods to be incentivised with preferential credit terms.

The article also quotes a local farmer (and potential beneficiary of the prgramme) Vicente da Aceca, a farmer from Assis, Ceará (CE): “It’s more crucial than ever that credit scoring takes into consideration all parameters available, the absence of which can lead to the type of punitive — and economically inefficient — rates all too prevalent in Brazilian agriculture today,” he says.

More details on the partnerships, technology and farming communities participating in the programme will be announced this month.

CreDA’s Credit4Good programme uses the principles of DeFi such as transparency, immutability to provide access to credit for people without credit histories or accurate financial data. It’s part of the company’s mission to fulfill the original promise of DeFi, shape the world’s most powerful and equitable credit ecosystem and give ‘credit where credit is due’ to nearly 4 billion people who have been victims of the Credit Paradox.

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More details on the partnerships, technology and farming communities participating in the programme will be announced this month.