Agri-tech platforms are introducing Buy Now, Pay Later services to farmers and revolutionizing the agriculture sector
Buy Now Pay Later (BNPL) services are expanding into almost every industry, including agriculture. Social media platforms are helping BNPL providers to advertise their schemes that can easily reach farmers. A few agri-tech platforms are now introducing BNPL services to empower framers and businesses with easy and convenient access to credit. For instance,
- Agro.Club, a US-based agtech company, has announced the collaboration with Spanish Neo bank Crealsa to digitalize financing by offering innovative tools in the agriculture industry in April 2022. This partnership offers supply chain financing and transactional services, including Buy Now, Pay Later shortly. Agro.Club is already an established technology platform in agriculture that provides digital solutions to input manufacturers, farmers, grain companies, and retailers. With this collaboration, the company can provide flexible payment methods like BNPL to farmers and help them grow their crop production. The Buy now pay later service can be renamed Buy now pay seasonally in agriculture with the extended repayment terms.
- Gramophone, a data-driven full stack technology platform that empowers farmers by working with them from the pre-sowing stage to selling their crops, has recently announced the integration of finance in their workflows with a BNPL approach.
- Jiye Technologies, a Pakistan-based agri-tech platform, launched a business-to-business (B2B) BNPL service through a digital finance product in February 2022. This product helps farmers and businesses under the “Jiye Khushhaal Karobar” program. With this initiative, Jiye Technologies is integrated with several licensed financing platforms to uplift the Pakistani agriculture sector. Farmers and small retailers will access small financing of around US$ 235 and can increase the credit limit once they repay previous loans. The BNPL program has already started with some expansion plans with input integrations to the farmers and agriculture sector soon. The Jiye Technologies BNPL solution offers transparent credit to farmers with flexible payback schedules ranging from 4 to 15 days and multiple payment methods such as digital wallet deposits.
- Arya.ag, an India-based Agri service platform, launched the BNPL service in November 2021. This BNPL service applies to buyers who buy approximately 150 to 200 tonnes of Agri produce and helps reduce finance challenges in the commodity buying space. Using Arya.ag platform, buyers can receive up to US$ 32000 credit with a 0% interest rate for a period of 14 days, and this amount can be increased up to US$ 0.25 million. Buyers must upload KYC and their financial details to avail of this BNPL service. The company plans to expand these financial solutions to warehouse rent and loan repayment.
- agPAY, an Australia-based Agri finance company, provides various finance options for crop farmers, such as input cost of seeds, chemicals, fertilizers, and water, as well as crop insurance and lease payments. The BNPL service called “Grow-now-pay-later” allows crop farmers to receive a credit of around US$ 34,950 to US$ 0.7 million approved within 48 hours. The farmers can repay the loans to agPAY in six to 12 months, and the loan duration is aligned with summer and winter crop seasons providing farmers the cash flow certainty.
As livestock and commodity prices skyrocket, some farmers and small businesses face challenges in continuing farming in severe floods and drought conditions. In addition to government and banking schemes for agriculture, the spurring of BNPL businesses can positively influence agriculture finance for farmers in the coming years. Increasing adoption of BNPL services in agritech companies is also fueling the financial offerings in the agriculture industry.
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