Blockchain technology may transform the lives of African farmers
London — A new venture plans to use blockchain to transform the lives of millions of African farmers.
Mineral investor African Potash Ltd is partnering with Global Markets Exchange Group International’s (GMEX) FinComEco to develop blockchain-based platforms for Sub-Saharan Africa’s agricultural commodity markets, according to a statement on Tuesday.
The "supply-to-demand system" will connect smaller farmers and traders with brokers and buyers to help them boost productivity and obtain better prices, London-based African Potash said.
Shares of African Potash, which plans to change its name to Block Commodities Ltd, rose 16.7% on London’s NEX exchange following the announcement. Several UK firms that embraced blockchain have also rallied in recent weeks.
The new venture will offer micro-loans to users of the system at about 12% which, it says, is half the rate farmers in the region are sometimes forced to pay. All supply-chain financing and transaction logging will be by blockchain.
"The biggest impediment to small-holder farmers in Sub-Saharan Africa is access to finance," Hirander Misra, GMEX’s founder and CEO said by phone from the fintech firm’s Mauritius base. Misra said he hopes the initiative will democratise access to finance in the region, spurring increased local consumption.
Société Générale and Deutsche Börse owned stakes in GMEX before its exchange and post-trade technology arm was sold in 2016.