Embedded finance is the integration of financial services into non-financial products and services. In the context of Agri supply chains, this could involve providing financing to farmers, wholesalers, food processors, and HORECA through digital platforms.
There are several ways in which embedded finance can create more efficient agri-supply chains:
Improved access to credit: Embedded finance can help to improve access to credit for farmers and other participants in the agri supply chain. This is because it can make the lending process more efficient and less costly. For example, a fintech company could partner with an e-commerce platform to provide working capital loans to farmers. This would allow farmers to purchase inputs and other supplies more easily, which could improve their productivity and profitability.
Reduced transaction costs: Embedded finance can also help to reduce transaction costs in agri-supply chains. This is because it can automate payments and other transactions, which can save time and money. For example, a wholesaler could use embedded finance to collect payments from retailers electronically. This would eliminate the need for paper invoices and checks, which could save the wholesaler money.
Increased transparency: Embedded finance can also help to increase transparency in agri-supply chains. This is because it can track financial transactions and other data, which can be used to identify inefficiencies and opportunities for improvement. For example, a farm management software platform could use embedded finance to track the movement of crops and livestock. This data could be used to optimize production and distribution, which could reduce costs and improve efficiency.
Enhanced risk management: Embedded finance can also help to enhance risk management in agri supply chains. This is because it can provide access to data and analytics that can be used to assess risks and make better decisions. For example, a weather insurance company could use embedded finance to provide insurance to farmers against crop losses due to weather events. This could help farmers to protect their businesses and reduce their financial risk.
Here are some specific examples of how embedded finance is being used in agri-supply chains:
Financial Inclusion for Farmers: In India, the government is working with fintech companies to provide financial inclusion for farmers. This includes providing loans, insurance, and other financial services to farmers through digital platforms.
Supply Chain Financing: In the United States, a number of companies are using embedded finance to provide supply chain financing. This includes providing loans to farmers, input suppliers, and food processors to help them finance their operations.
Food Traceability: In Europe, a number of companies are using embedded finance to improve food traceability. This includes using blockchain technology to track the movement of food products from farm to fork.
How MandiBoyz use embedded finance to increase efficiency in agri-supply chains?
Financing to farmers: MandiBoyz partners with a financial institution to provide loans to farmers. This allows farmers to purchase inputs and other supplies more easily, which could improve their productivity and profitability.
Offer BNPL (buy now, pay later) options to buyers: MandiBoyz offers BNPL options to buyers. Buyers can purchase agricultural products without having to pay anything upfront. This makes it easier for buyers to purchase the products they need at reduced interest rates.
Automate payments: MandiBoyz automates payments between farmers and buyers. This saves time and money and reduces errors. MandiBoyz integrates with a payment gateway to allow farmers and buyers to make payments electronically. This eliminates the need for paper invoices and checks, which saves both parties time and money.
Track financial data: MandiBoyz tracks financial data related to its agri supply chain. This data can be used to identify inefficiencies and opportunities for improvement.
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