If banks in general have a reputation for being a bit slow to embrace new technologies, agricultural banking has a reputation for bringing up the rear. In many ways this is because of how desirable that in-person connection is when dealing with assets like family farms. Technology means automation, and if agricultural producers start feeling like “just a number” in the eyes of their community bank, a crucial point of trust breaks down.
However, there’s simply no resisting change forever. FinTech is leading the charge to disrupt the agricultural banking industry, with a generally positive response from producers across the world. Keeping up with innovation is no longer a luxury, it’s a necessity. It’s also an opportunity to provide better service.
Let’s take a look at some of the ways that cutting-edge FinTech is reshaping the agricultural industry, and how it’s hoping to create a better agricultural economic system in the long run.
Improved access, more power to farmers
Getting farm loans has often been a difficult process for farmers just starting out, with small operations, or who are part of underrepresented communities. These farmers stand to benefit the most from FinTech innovations that reduce red tape and facilitate connections with the buyers and importers they depend on.
Take, for example, ProducePay, a FinTech out of Los Angeles that provides financing and marketplace tools for North, Central and South American growers that serve the fresh produce market. Another example, Pula, is a startup that operates out of Switzerland and Kenya. It’s dedicated to facilitating access to agricultural insurance for smallholder farmers, particularly in the developing world.
Better data means more financing opportunities
Something else that FinTech is addressing is the challenge of accurately assessing credit risk for farmers, particularly in very rural contexts. In the past, it could be difficult to track down all the data points necessary for a bank to make a sound decision on credit. Not to mention remote locations and low population density made serving rural farmers more expensive, and thus less attractive to many major financial institutions.
Fortunately, with automation, reduced overhead and powerful data tools, FinTech is fast becoming a solution for these old problems. Several FinTechs serving different parts of the world have moved on this particular need, with StreetShares (AKA Atlas Platform) and FarmDrive being two prominent examples.
Agri-Access helps community banks stay competitive
At Agri-Access, we talk a lot about increasing the lending power of community banks, ultimately allowing their producers more opportunities for expansion and growth. But we’re also helping our community banking partners move faster and increase their flexibility. These traits are essential to staying competitive amid so many FinTech-driven industry disruptions.
Our scorecard program guarantees a 24-hour turnaround on decisions regarding loans up to $2.5 million. What’s more, our appraisal and loan processing teams work with a suite of sophisticated digital tools to collect and process information quickly and remotely, such as the Maven tool we discussed in our interview with Certified General Appraiser Diane Zelhart.
Reach out to a relationship manager today to learn more about how Agri-Access can keep you innovating in this evolving world of FinTech solutions.