Innovation doesn’t mean new devices or new smartphones; it means new way to use those devices, smartphones and algorithms. Let’s consider Blockchain: it’s known as the platform for cryptocurrencies, for tracing objects around the world or managing contracts.
But a Jamaican entrepreneur is going to use it to ease the loan access for Jamaica’s farmers.
Varun Baker is the software engineer creator and founder of FarmCredibly, the startup winning in 2017 an hackathon in Kingston using Blockchain for agriculture. Better than my words, let’s Varun speaks us about FarmCredibly.
Rolando Mucciarelli: Hi Varun, thank you for your time. Tell us any words about you
Varun Baker: Well, one interesting fact about me is that I used to live in Italy so I enjoy good wine. My background is as a software engineer and got started applying technology to agriculture over 10 years ago.
RM: What is life of farmers in Caribbean, what their obstacles or troubles are?
VB: Many farmers in the Caribbean live a great life, I really think farmers are some of the smartest people in Jamaica. In general I think farmers in the Caribbean want access to markets and to financing that will expand their production. One obstacle is the high cost of the mechanization that make farms more efficient. In addition to this, it is much much easier to receive a loan to import a Japanese car than it is to invest in agricultural production.
RM: So tell us a little bit about how you came up with the Farm Credibly idea
VB: In November 2017, we won first place at a blockchain themed hackathon that was held in Kingston. The event was sponsored by IBM, a big telecom here called Flow, and a commercial bank called NCB. I think that because one of the main sponsors was a bank, we started problem solving from the point of view of creditors and came up with the concept. Since then the idea have evolved and right now we are gearing up to launch a crowd funding platform for our best farmers on farmcredibly.com so that individual investors can find farmers to invest in.
RM: How it works?
VB: Farm Credibly simplifies financial services for underbanked farmers who are productive but want to be more productive. We bring together multiple entities within farmers’ business network on behalf of farmers. By getting data from suppliers and distributors, a trusted and secure farmer profile is established.
Farm Credibly empowers creditors with the means to reduce risk in issuing loans and micro-investments to underbanked farmers by leveraging Blockchain technology to provide alternative credit scoring.
Worldwide 2.7 billion people are considered unbanked. 86% of Jamaica’s population is underbanked meaning they do not have access to full financial services such as loans (from FarmCredibly website)
RM: Blockchain is a great algorithm, but can credibly and reliability be managed like financial transactions?
VB: Well we don’t try to manage credibility or reliability like financial transactions. What we really do is to record financial(and other) transactions on the blockchain and use these records as an important ingredient in assessing the creditworthiness of farms and farmers. The nice thing about this technology is that the data is tamper resistant and privacy is enforced so that even though information is being shared across a distributed ledger, only those granted permission are able to access the details.
RM: Are Blockchain smart contract used from Farm Credibly?
VB: Yes, we are using smart contracts in two ways. One is to calculate a credit score for our farmers based on factors such as a transaction history.The other way is in handling disbursements of loaned payments to our farmers where persons receive payouts based on hitting their production schedule and targets. Overall we are finding that smart contracts represent a good way to reduce costs when it comes to processing loan applications and disbursements.
RM: How do you think about Agri Tech: sensors, drones, data analytics in agriculture?
VB: I think it’s all so amazing. There are so many amazing applications in these areas that I’m seeing everyday. I’m really excited about the future of agritech.
RM: Would you tell us about Farm Credibly future development?
VB: Yes, in the next 5 years we’d like to expand beyond the shores of Jamaica (once we have the basic model working here). The Caribbean is of course the next natural expansion for our product but ultimately I’d like to be operating on the African continent as well. As you mentioned, sensors, drones, data analytics, etc. are all areas we can expand into but there are also applications of our tools that will help other micro, small and medium enterprises who also need access to credit but perhaps don’t operate specifically in the agricultural sector. The nice thing is that because we are a startup, we can spend some time learning from the market and adjust accordingly.
RM: How do you find your customers? Do you walk around Jamaican farms, public evemts, or so? And, how many customers Farm Credibly has, yet? VB: To give you some idea of numbers, we are starting with featuring just 6 farmer profiles from our list of over 200 farmers and will soon grow this to publish 10 in the near future. Events such as Denbigh, a big agricultural show in early August are where we plan to be exposed to many additional farmers and agricultural stakeholders that provide good opportunities for us. Our real customers are micro-lenders and individual investors who we find by calling, meeting, and having several conversations here as well as by sharing links online to learn from how persons respond to our farmer profiles. I hope this answers your questions. We are working hard to better understand our customers and look forward to really refining what this looks like over the next 3 months.
You can read other deepening on Medium. Access to loan is a great problem, because banks are not just known for their good soul. Farm Credibly’s challenge is really interesting, and it demonstrate how technology, in the right hands, can improve the life in unthinkable ways; this is the real industrial revolution, when innovation enter in the daily habits of people.
Thanks again to Varun Baker for his time, I’ll make you update about Farm Credibly.