Grain producer Júlio César Pereira Júnior, from Pombo Farm, in Uberlândia (MG), relies upon credit in order to finance his next planting season. Without it, he is unable to purchase the seeds and tools necessary to begin planting his crop, mainly soybean and corn. In the past, he relied upon a cumbersome process that involved endless visits to the bank and could take up to 6 months.
Now, he has all his registrations, environmental licensing, tax records, and other documents digitized in a single location. He is able to apply through the digital platform developed by Nagro to receive pre-approved credit from a variety of sources, and his funds are released in just 8 days. Thousands farmers like Julio are benefitting from the fintech revolution sweeping across Brazil.
Revolutionary fintech solutions, like Nagro, are essential for driving business growth in any sector. With the Born2Invest companion app you can keep up to date with the latest trends and make sure that you are ahead of the curve with the latest business headlines at your fingertips.
Fintech in Brazil has reached a watershed
Júlio typically requires financing for 70% of the crop planted on his 4,200 hectares. For the 2018/19 harvest he needed approximately $2.65 million (R $11 million), of which $0.48 million (R $2 million) was guaranteed through digital CPR.
The platform has revolutionized the lives of farmers like Júlio. It has improved cash flow, reduced administrative overhead, and allowed farmers to focus on their fields instead of admin and loan applications.
Nagro is one of the 493 fintech companies (startups linked to financial solutions) operating or being developed in Brazil, according to the Brazilian Startups Association, an entity that gathers about 11.000 members. In 2015, according to the ABS, this segment registered 345 companies, in other words, the growth reached 43% in just over four years.
A milestone for producers
The fintech company, headquartered in Uberaba, saw its turnover double from one year to the next. Since 2016, when Nagro implemented the digital platform, it has provided producers with an overview of credit possibilities, in addition to analyzing credit and risk.
Currently, the 280 producers who have already used the platform have received $96.30 million (R $400 million) in credit. “There are 75 to 100 more producers per year, with the prospect of expansion to 150 to 200 by 2020,” estimates Alves.
One of the most popular features of the platform is digitized paperwork and legal documents. By putting all the guarantees and paperwork in a single location, it makes it easier for farmers to organize their applications whilst also making it easier for credit agencies to approve applications. It also removed the need to involve notary offices, a process that involves a great deal of travel for farmers.
A platform that gains trust
An interesting strategy adopted by the startup in the platform was the application of the concept of success rate. That is, the startup only receives their commission when the money is released to the producer. “We have to overcome the mistrust barrier”, explains Gustavo Alves.
Another company that mirrors this model is Bart Digital, from Indaiatuba (SP), which, like Nagro, has developed a solution to accelerate the release of agricultural credit – in this case, in the barter modality. It means that the payment of the financed inputs is made later on, after the delivery of the produced crops.
Inaugurated in 2016, Bart Digital has already handled operations in excess of $168.55 million (R $700 million) and has a portfolio of 60 clients. According to the executive partner Mariana Bonora, the “traction” phase began in 2019, with clients among many sectors, like re-sales or investment funds. “A complete barter operation can take up to 160 days to complete, 60 of them with CPR alone. With the ‘dematerialization’ (transition from paper to digital), we were able to get CPR ready to sign a producer in 15 days. The goal is to make it 5 days.”
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